Women: Wake Up, Wise Up, Save Up
Feb. 5, 2007 — -- Women -- wake up, wise up and save up: A man is not a financial plan.
With almost half of first and second marriages ending in divorce, there is a high likelihood that women will be responsible for their own or their family's finances one day. Even the best marriages usually come to an end -- women outlive men an average of seven years, and the average age of widowhood is 56.
To help women take responsibility for their financial futures, Mellody Hobson, "Good Morning America's" financial contributor, recently shared advice that women of all ages can follow.
Every woman needs to know what and where her family's assets are.
"Even if you are not the primary organizer of your family's finances, you can't bury your head in the sand. Be aware of the big financial picture and get informed about your family's finances," Hobson said.
It's also important for a woman to maintain her own financial identity.
"Establish and maintain your own credit history with a credit card in only your name," Hobson said. "Do the same with a personal bank account."
The second part of "wise up" is work related. Many women opt out of the work force for some period of time to care for children. But they pay the price when they return: Taking time off to raise kids can affect seniority and earning potential.
The Center for Work-Life Policy study says that on average, women who "off-ramp" for 2.2 years lose 18 percent of their earning power. That figure rises to 37 percent when taking off for three or more years.
"If you do decide to leave your job, make sure you leave on good terms, giving adequate notice and getting references and letters of recommendation before you leave," Hobson advised. "Timing is key. If you are just a few months shy of vesting stock options or a retirement plan, stick it out."
While taking time off, maintain professional certifications and if possible, enroll in classes to stay sharp. Be sure to sustain professional relationships, because they will be invaluable when the time comes to return to work.
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