By Joan Baker
Women should have wonderful lives but many do not because they end up having very few choices owing to financial constraints. The first step to changing this situation is to take charge and resolve that you will have the life of your dreams. After all, it’s your life and you should ensure that you have a good life for as long as you live.
Dispelling the fairy tales.
Taking charge requires a change of attitude for many women because so many have grown up believing that money is someone else’s job – your parents when you are young and later, the job of the man in your life. Girls are often brought up on a diet of fairytales such as Cinderella, Sleeping Beauty, and Rapunzel – all of which require only that she be beautiful and await her prince for rescue! The ‘adult’ versions are no better and we have all enjoyed movies such as ‘Pretty Woman’ and ‘Bridget Jones Diary’. These are delightful fantasies but can continue to reinforce the notion that we can be irresponsible about our finances and the prince will take care of ‘happily ever after’!
Financial fantasies.
A man is not a financial plan. Women harbour other fantasies about money including winning Lotto and waiting for legacies to arrive out of the blue. Statistically we are far more likely to be left in the cinders than have any of these daydreams come true. How many glass slippers or knights in shining armour have you seen lately? Yet another female fantasy is that the law will come to the rescue. Fair minded creatures that we are, we often do not believe that there is very little that the law can, or will, do if we are alone and poor in old age, or if we are unable to work, or if we are left alone with no income and small children to care for. The law provides very frugal security and benefits, for example, at present superannuation for a single person is only $12,000 per annum.
So having decided that you will take charge and make a wonderful life for yourself the next steps include:
Have a dream.
It is very important to know what you want if you are to have any chance of achieving it. Ask yourself what the life of your dreams would be like. If you did win Lotto and money were no object and you never needed to work again what would you do? How would you spend your time? What would you want to have in your life? Who would you want to become? We are often so consumed by our busy lives and the struggle we face from pay packet to pay packet, that we never stop to consider what we really, truly want for ourselves and our loved ones. Take some time to consider it – it may be the most important daydreaming you have ever done. When we know what we truly want, it is much easier to find the energy and the courage to do something about it.
Set some goals.
Dreaming and building castles in the air is very important. The next stage is to get more specific. What are some of the areas where you can set clear goals? For example, one of your dreams may be about security and an appropriate goal to meet this value might be owning your own home and having enough investments to allow you to stop working when you are 55. Another dream might be about becoming better educated and an appropriate goal could be completing a tertiary course. Many dream of travel – a linked goal might be to complete a two-year round the world trip. The importance of setting goals is that they anchor your dreams to real events and activities that you can start to take action on. The clearer they are the better – use dates (eg by 2010), value (eg a home worth $450,000, investments of $200,000) and numbers (eg a two year diploma, see 20 countries on $10,000) as much as you can. Numbers pin you down and they can’t be fudged. Remember, however, that it’s not the numbers or the money that really important – what’s really important is that you have a wonderful life until the end of your days. The money is only a tool.
Create a plan.
Having a plan takes you another step closer to your dreams. A plan is simply a document to help you close the gaps between where you are now and where you wish your goals and dreams to take you. It’s really important to write things down – we seem compelled to take action on plans we have written rather than one we have just thought about. So commit some stuff to paper even if it is only your first steps such as starting to save for a home deposit, looking at houses for sale, calling the polytech for brochure on their diploma courses, getting a wall map of the world… Keep your plan as simple as possible as you can have several revisions and updates as time goes by. Planning is something you should take seriously: Make sure you have some quiet time early in the day so you are not too tired to think. (If ever there was an excuse for a ‘sickie’ planning the rest of your life seems like a good one!) You can do your plan alone or you may have a partner or a friend whom you feel would be a help. Put as many numbers in the plan as you can – coming up with numbers forces you to be clear and specific about what you are going to do and they also make it easy for you to track progress. For example if you say you will put $100 into a savings account every pay period, that is much clearer and more measurable than simply planning to ‘save more’.
Remember, you are planning the life of your dreams. This is not about the money; it’s all about you and what you want. People first; money second.
The views or information given in this article are not necessarily the views of AMP or AMP Adviser Businesses. It provides general financial information and is not intended to provide financial advice. For personalised financial advice, we recommend you contact us.