I was just reading an article that 80% of people do not discuss their finances with anyone — even if they are in a relationship.
Money is such a personal and emotional topic and that makes sense. We work hard for our money and it is important to us but financial education is so important to achieve the financial security and independence you deserve. I think the one reason no one likes to talk about their finances is that many people believe that they should already have their financial house in order or know all the answers.
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I am definitely here to tell you that you aren’t alone and most people don’t have it all figured out. Financial education was never taught to us in high school let alone college unless you were a finance major like me. Also, there is so much financial industry jargon which makes learning about investing intimidating and I am a big believer that it really doesn’t need to be that way anymore.
A recent survey from Vanguard showed that the average Retirement Account balances by age which are included below, really aren’t going to be enough for most Americans to have an enjoyable retirement.
Take a look and where do you fit in?
If we can normalize the discussion of saving for retirement in our 20’s and 30’s then the entire country will be in such a better place 20 or 30 years from now.
Just know that most people don’t have everything in a tidy package in life and that if you take some small steps in learning the basics you can set yourself up for a great future ahead. Talking about your finances can also help you in many ways. You can get good ideas from others or just realize that you shouldn’t be embarrassed that you don’t have it all figured out yet. Also, here are a few ideas to get started in the right direction. Once a year set aside some time to get a financial checkup. Review these areas of your life to make sure you are on the right track!
- Review your insurance policies to see if you can save money
- Review your emergency savings plan and budget
- Review if you are contributing enough to your investment accounts based on the money goals
Another misconception I hear a lot is that you think it takes a lot of money to get started and that just isn’t the case anymore. You can be a successful investor with a small amount of money every month. It does take time this way but use time to your advantage if you can.
You don’ t need to be a math wiz or pick your own stocks either. Investing for the long term has gotten so much easier today versus 10 years ago because information and low fee funds are more accessible now to everyone.
We are all suffering from inflation driving up our costs and we don’t know how long this will last. Combine that with a falling stock market and most people are nervous about what to do with their money. That is very understandable since money is an emotional topic. We do work hard for it.
Thinking long term can help us have some perspective on how to make good financial decisions. Most of us tend to project into the future, what is happening in the moment but the truth is that the economy works in cycles and the bad times do not last forever.
If you understand that investing has cycles too and you just need to get started then your money will grow for you in the long term. Understanding history can help you make better decisions so here are a few key points to think about.
Recessions in the US happen every 8 or 10 years and it’s the natural part of our economic and business cycle just like having a down stock market. You need to think about investing in stocks with a 7 to 10 year time frame and know that the stock market will be positive usually 7 years out of every 10. Once you realize this and don’t panic when the market is down you can see that it is actually an opportunity. It is hard to time your investments perfectly, so you just consistently contributing has proven to be great system for success.
The real question isn’t if you should be investing in the stock and bond market, it’s what % mix of each should you have based on your situation and goals. It isn’t as hard as you think to learn this once you take a little time to know some basic concepts.
If you want to learn more along with your significant other or by yourself then check out my website www.DebraOhstrom.com to see how I can help.
Bye for Now
Debra
Debra Ohstrom, CFA
Founder | Debra Ohstrom.com
Build Your Financial Strength
DEBRA OHSTROM
Debra Ohstrom, CFA is a financial educator and coach focused on empowering women to be confident and in control of their financial wellbeing. Debra has worked in the financial industry for over 25 years and has an MBA in Finance and the Chartered Financial Analyst designation. She has built an on line course and coaching program to educate women to understand money and investing with ease so they can achieve the life they desire.
Debra has spent a majority of her career working at large firms such as Merrill Lynch, Morgan Stanley and Citi Private Bank in New York City and traveling the country working with clients. She grew up on Long island, NY and now lives in Charleston SC with her husband.
Being raised by a single mom, Debra watched her mother struggle with money and saw how that impacted other parts of her mother’s life whether it was her health or her relationships. This motivated
Debra to become a financial expert and Debra is on a mission to demystify money and long-term investing so that all women have the knowledge they need to make good decisions for their financial
health and achieve a secure financial future.
