Women in Business Don’t Take Enough Financial Risks

Is it true that women in business don’t take the financial risks necessary to get ahead? We know that women still earn only 78 cents on the dollar compared to men and though there are plenty of women middle managers, there are dismally few at the CEO level. According to Lois P Frankel, author of Nice Girls Don’t Get Rich, these are symptoms that reflect the social training girls and young women receive about “doing good and being nice” over getting ahead. Making money and being the good girl, wife, or employee can be in direct opposition to a path of power and women will often pick the path of least resistance. Though understandable, this is not a great strategy for your bottom line, (and I don’t mean the bottom you sit on). This is especially true as women move into their retirement years.

What are the risks women should be taking?  To name a very few: 1) starting a new business or 2) investing in real estate or the market or 3) NOT giving their adult children money to bail them out of self-induced situations. This last one is a huge money mistake for women and pops up all the time with my Money Coaching clients.

Women in Business: Here are a couple questions to think about to give you Financial Peace:  1) Where do I sit on the risk continuum? Am I fairly conservative, risk aversive and so need to work for someone and get a steady paycheck? Or am I ready to leap tall “start my own company” buildings, and get sound business help to do so? 

2) What risk am I willing to take in 2012? It could be as simple writing down all your purchases for thirty days. As Ellen the talk show host says in her new book: Seriously, I’m Kidding, (paraphrasing) “Stretching is more than doing yoga, it’s taking risks.”

Why Are Only 8% of Women Ready for Retirement?

Women control 51% of the wealth in America. I was shocked and pleased to hear that and yet many, many women I talk with aren't planning soon enough or saving anywhere enough for retirement. Instead what I observe is that women often don't want to think about retirement. And, while I understand, retirement going to be here sooner than we'd like to imagine.

Women are working very hard in their businesses, caring for their children, their families (including elderly parents). Who has the time to consider and plan how to make their money work for them?  When I'm coaching women in business I assess how much income they're earning, if they feel they're charging enough (often not), how their spending is, the amount of debt they are carrying and whether they have a 401(k) or other investment vehicle. 

Here are three things women need to do. And remember: "A man is not an retirement plan."Deborah Price, Money Magic

1) Just Start an investment account. The earlier the better. "For the first time, women in the work force full time are just as likely to have access to a 401(k) as men and their participation rate is as high as we've seen." Catherine Collinson, president, Transamerica Center for Retirement Studies. (Modesto Bee 2-5-2012)

2) Know what you'll need to replace your income in retirement and maintain your lifestye. Google retirement calculator, pick one and plug in social security, other income and expenses. This exercise is not as fun as going shopping, but when you're 75 and either don't want to work or are unable to, all those shoes or beauty products you're buying today aren't going to keep you warm or add to your income. But the $50.00 a automatically deducted each and every month can and will.

3) Take more risks. Women don't often take investment risks. I'm financially conservative myself, yet we want our money to work as hard for us as we've worked to obtain it. Women still only earn 78 cents on the dollar compared to men. We take time off to have children or caretake others. The really savvy women I know do take calculated risks. One of my friends has been a real estate investor for 30 years and built quite a retirement fund for herself. Here's to you taking charge of your money today so it works for you tomorrow!!

Won't More Money Will Solve All My Problems?

"If I just had more money, my problems would be solved." According to Brad Klontz." (author of academic study, "Money Beliefs and Financial Behaviors: Development of the Klontz Money Script Inventory," published in The Journal of Financial Therapy)  most Americans fall into this money belief pattern.

Our self-worth and our net-worth are very intertwined in American culture and our money beliefs are for the most part unexplored and below the surface of awareness. Have you ever overreacted to a financial situation like your spouse asking you something about the household finances and wondered, "What just happened?"  I know I have. That reaction is tied to your unexplored money beliefs, habits, attitudes and patterns.

The Klontz Study says there are four categories of "money scripts": money avoidance, money worship, money status and money vigilance.

Those of us who avoid money distance ourselves from money. (I used to, but no more). They stick their head in the sand, may abuse credit cards, believe they don't deserve to have money and can sabotage themselves and not understand why.

Then there's a money worship group that believe more money or a windfall will solve all my problems. They are status oriented. They will use credit cards to buy to impress others. Anxiety and status can cause people in this group to take  financial risks.

Understanding and exploring your money beliefs and how these affect the financial stress in your life and how you make financial decisions is life changing. Every money coaching client I've worked with has made belief and attitude shifts in the middle of the coaching process because of the light bulbs of awareness that occur. That's exciting and empowering.

Klontz doesn't let people off the hook regarding the homes they bought and couldn't really afford. He says don't blame Wall Street, but "...what led you to buy a house you couldn't afford?" I don't believe in letting the banks off the hook though.

To understand your money attitudes, beliefs and behaviors more read Mind Over Money by the Klontz's or my favorite: Money Magic by Deborah Price.