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Women have different needs than men when it comes to protecting their money.  Like men, women need to be aware of the common risks such as:

  • Theft
  • Fraud
  • Lawsuits
  • Accidents
  • Taxes
  • Diversification

These risks can be managed with good advice and adequately covered through  insurance.

Assets and income need to be protected from theft and loss, and as your  wealth grows your risk increases as you become a target for potential  lawsuits.

If you are under-insured for liability, property coverage, disability or  life, then you are putting yourself at additional risk. Many people are  underinsured because they are not reviewing their policies regularly, or they  don’t understand what their policies actually cover. It’s important to  understand what your risks are and make sure you have an expert review your  coverage periodically.

But women have other unique risks that need attention, especially as she  gains control of her money and begins to increase her wealth. As her wealth  grows, so does the need for protection!

Women may need additional protection from uninsurable risks such as:

  • Naiveté or Innocence
  • Spending on emotions
  • Relationships
  • Family &
  • Legacy

 

Naiveté or Innocence

Naiveté, or innocence, puts women in danger because they can easily be taken  advantage of. This may be intentional or unintentional, but it is certainly  easier to sell something (like an insurance policy, real estate, an investment,  a car repair, or something as simple as a nick-knack) to someone who doesn’t  understand it and doesn’t ask questions. So maybe the agent isn’t intentionally  trying to harm you, but if you don’t know what questions to ask, neither of you  will know whether it’s right for you or not.

So, don’t try and avoid a potential conflict or frustration from the agent or  any salesperson. Continue to ask questions until you feel confident and  competent about your options. Then you can look at the consequences and make a  smart decision.

 

Spending on Emotions

And what about emotions? Spending to fulfill an emotional need such as  comfort, happiness, or the biggest danger…guilt, puts women at the highest  risk because it shuts off objective, rational, decision making.

Doesn’t guilt tend to come when you do something you know you shouldn’t be  doing, but you do it anyway?

One problem is that many are confused as to what they ‘should’ be doing, and  therefore it’s easy to feel guilty… whether or not it’s appropriate.

For example, have you ever felt guilty for buying something for yourself?  Oftentimes women have a hard time buying anything for themselves, so the  smallest purchase can trigger guilt. At other times, some women spend out of  control and feel guilty that they’ve overspent, or overbuy for their children  because they feel guilty about their parenting.

Either way, guilt would disappear if you were working objectively toward your  goals with a solid financial plan, right?

You can build into your plan money for these things, but with proper planning  you can do it in moderation so that you don’t neglect yourself, over-spend, or  put your future at risk.

 

Relationships

Women should be cautious of their partner’s money habits and patterns before  getting into a relationship. In a new relationship, it’s easy to ignore the  warning signs of a financially immature person…we see their good qualities and  ignore the red flags. But when it comes to money patterns, this is a time that  you cannot afford to ignore the warning signs.

Love can certainly have its blinders, but make sure to keep an eye open to  how he spends, if he’s in debt, and how he discusses his financial situation (or  if he’s secretive).

Even if someone you love isn’t intentionally trying to take advantage of your  finances, his poor financial habits could be devastating to you. Keep your money  separate and safe, and consider a pre-nuptial agreement before marriage.

A client of mine had built up her net worth during her single years, had  great credit and a promising career. After falling in love with a man that lived  on his potential (not his reality), she was broke, in debt, several foreclosures  and lost her credit by the time they split up. Had she been more aware of the  warning signs, she may have been able to protect herself better.

 

Family Legacy

And, when it comes to your family, it is very important that you have a  legacy plan for your wealth. If you want to see your money go to the loved ones  that are important to you, you must protect yourself with good estate protection  planning.

Not properly planning for your death by ignoring simple estate planning tools  such as a will and living trust, could create a substantial loss of money you  could have transferred to them. If your estate ends up in probate, you can  expect 3-7% to go to probate fees and even worse, you could end up paying the  full estate tax (possibly as high as 55%).

But unfortunately many women overlook the need to make a plan to protect  their assets because they figure that:

  • It’s already handled
  • Someone else will do it for them, or
  • It  doesn’t apply to them

And here’s another reality – without a comprehensive plan that includes the  possibility of mental incapacity and death, you will leave these important  decisions up to

  1. your spouse or partner,
  2. your children,
  3. other family  members, or
  4. a judge

In all four cases you are not the one in charge, and  your views will be significantly different than theirs.

The bottom line, don’t let your fears and procrastination give away your  power to make important decisions about your assets. Being prepared is essential  in sustaining your lifestyle, not to mention maintaining the freedom of  transferring your assets to your heirs in the manner YOU want them to go (rather  than how the courts say they should go).

Smart women protect their money by taking action. They take the time to study  the financial skills they need. But most importantly, smart women work with  smart advisers! Women cannot afford to ignore their money issues and bury their  heads in the sand. Over 90% of all women will manage the family money at some  point it their live, and over the next decade, women will account for over 85%  of consumer purchases.

We need to be smart about money. The world needs us now more than  ever.

About Author:  Angie Grainger, CPA/PFS, CFP® is The Black Belt Money Master and her passion is helping others become at peace with money.  Even more importantly she helps couples use money as a tool to transform their relationships, get on track with their ideal life…and stay there!  She is considered the Black Belt Money Master because of her Karate and Yoga background and now she combines her wisdom of martial arts with her financial expertise to bring powerful money programs that surpass time tested principles.

Angie is a dynamic speaker, workshop leader, author of powerful books including “The Joneses Are Broke!” as well as an experienced CPA and financial planner.  Angie has been working with high-net worth individuals and closely held businesses since 1993.  Her experience at a large regional accounting firm led her to assisting business owners in incorporating financial planning with income tax, estate tax and business succession planning.   In banking, her role as Vice President and Managing Director of Financial Planning, Angie lead a team of advisers that engaged clients in discussions about financial and life goals.  And now as a Money Coach, Angie helps people use money to transition into their new and desired lives. For a FREE eBook: 7 Secrets Women Must Discover to Create & Protect Their  Wealth http://www.bayareawomenandwealth.com/

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