The Maven: Finding Your Financial Confidence
Here are five steps to financial confidence, which surprisingly have nothing to do with finance-speak or how to compute rates of returns. They do, however, have a lot to do with knowing and appreciating yourself.
1. Know what you value
What’s really important to you? Clarity about the answer becomes your anchor in seas of financial uncertainty or excess. When you face a financial choice, ask yourself how the choice might honor or undermine what you value. You’ll then be able to make a good financial decision.
2. Know your own value
In this case, “value” pertains to your worth in the workplace. You may know the balance of your 401(k) or bank account down to the penny, but do you know what your human capital—the portfolio of your education, skills, and experience—is worth to an employer? Find out. Plenty of job search websites have this information. Network within your profession or go for some job interviews—even if you have a job—just to get some intelligence about what a position of a given description and responsibility is worth.
3. Speak up
Once you know your worth, ask for it. Don’t be afraid to negotiate. Your lifetime earnings are critical to your financial success. Failing to ask for even as little as $5,000 more for a first job can cost
you hundreds of thousands over a lifetime in earnings, retirement contributions, and even Social Security benefits.
4. Recognize that you don’t have to know everything
Women are often cautious, careful learners, believing they must know everything in order to know anything. Relax: it’s impossible to know everything in a field as mutable and complicated as finance. There is even a Nobel Prize-winning theory that holds, in the case of investments and markets, that no one can be “first” or “smartest.” Therefore, it is foolish, if not expensive, to even try. In fact, it’s wise to ask lots of questions and not worry about appearing ignorant.
5. Find a good adviser who puts your interests first
As with tip number three, spend some time on this one. Interview more than one candidate, and make sure the trust chemistry is there. Even if you’re smart about finances, getting competent advice gives you an edge of confidence in your financial decisions.
The results? Uncommon financial confidence for uncommon women.
—By Eleanor Hotchkiss Blayney ’73
Eleanor Hotchkiss Blayney ’73 is the consumer advocate for the Certified Financial Planner Board of Standards and author of Women’s Worth, a book about how women can make the most of their financial lives. Follow her on Twitter @EleanorBlayney.
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This article appeared in the fall 2013 issue of the Alumnae Quarterly.
November 5, 2013