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It could be the most important decision you make. There was a time when the discussion of money and its management was considered a male domain, and women shied away from the discussion, but that has changed.

GOOD NEWS
According to the Center for Women’s Business Research, women now control $14 trillion in assets — and that is expected to grow to $22 trillion within the next 10 years. Interestingly, women also make up 43 percent of affluent North Americans, which isn’t surprising when you consider that women are starting businesses at twice the rate of men. The Center for Women’s Business Research further reports that there are currently 10.6 million women-owned businesses in the United States, employing 19.1 million people. Women make up approximately 52 percent of the population, and information from the National Center for Education estimates that by 2010 women will control 60 percent of the wealth in the United States.

WHY SO IMPORTANT
From the research, it sounds as if women are doing quite well as money managers. So is personal money management really important? The financial services industry, women’s organizations and other interested groups say yes. According to the Gallup Organization, in 2000 women ranked financial issues as the most pressing personal concern in their lives — ahead of family, health, time and stress and equal rights. Women face issues similar to those of their male counterparts. They have the same need to budget their income wisely, carry adequate insurance, maintain good credit, set aside sufficient savings, plan for goals and do effective estate planning. All of this can seem like a daunting task. In a 1997 study by Dreyfus and the National Center for Women and Retirement Research, they found that 33 percent of women investors avoided making decisions out of fear of making a mistake. They go on to say that as a consequence of this fear women often defer financial decisions and money management to the men in their lives. A survey conducted by Oppenheimer in 2005 found that women are much more informed about financial matters than they were 10 years ago. But they also say that only 14 percent of women have $100,000 or more saved for retirement and only 47 percent who invest know that stocks have been the best-performing asset class over the last 30 years.

WHAT DOES THE RESEARCH SHOW?
Why is financial literacy and money management so important for women?

The statistics tell the story:
• Women still make an average of $.76 for every $1 earned by men.

• The average woman spends 15 percent of her working years outside the work force caring for children and elderly parents. (Source: Women’s Institute for a Secure Retirement)

• Women retirees receive only half the average pension benefits that men receive.

• Fifty percent of marriages end in divorce. (Source: Women’s Institute for a Secure Retirement)

• Women outlive men by an average of seven years and are often widowed by age 56. (Source: United States Department of Labor)

• From 80 to 90 percent of women will be solely responsible for their finances at some point in their lives. (Source: National Center for Women and Retirement Research 1996)

The statistics reveal that women need to save more and invest more wisely for their financial future. The good news for women is that there are many more resources available to aid them towards financial independence. Whether books, seminars, financial advisors, Web sites or other printed materials, most resources have as their goal to help the investor better understand not only the terminology but the many investment choices that can be made. From the research and statistics, it is clear that women need to be effective money managers. There are a few money strategies that once implemented can have a large impact on our financial future. The earlier we start, the larger the rewards can be.

STARTING IN YOUR 20s
Budget: Have a workable budget, know where your money is going, and monitor your expenses. Financial advisors will tell you that one of the best ways to become financially independent is to live below your means.

Savings: Have a savings account. Ideally, set aside a reserve of three to six months of monthly expenses. Then if some unforeseen financial event happens, you can meet the need. It’s also a good idea to save for large expenditures.

Credit: Monitor your credit and maintain a good credit rating. Over the course of your life this could save you thousands of dollars.

Retirement: If your employer offers a retirement account, start contributing. If you are self-employed, consider establishing your own retirement plan. Further, consider opening your own Individual Retirement Account, either a regular IRA or a Roth. Consider opening a nonretirement investment account.

Insurance: Seek out an insurance professional who can help you protect your assets with insurance.

Financial advisors: Consider seeking professional financial advice. Many advisors devise financial plans for their clients and include projections to be sure that you meet your financial needs at retirement.

Estate planning: Wills and trusts are an important part of estate planning.

WHAT TO DO AFTER 40
Money management: Continue with a good workable budget, make savings a habit, maintain your good credit standing.

Investments: As you get closer to retirement, carefully review your investments to make sure that you will have sufficient assets to retire. Review your portfolio. You may want to reallocate investments to meet your retirement timeline. Also consider annuities as a way to supplement monthly income in retirement.

Estate planning: Periodically have your wills and trusts reviewed to make sure they reflect your current situation. You may also want to review your insurance needs.

Every woman’s situation is different. This list of suggestions does not include every possible scenario. It is important that you seek professional advice.

Your money management style and the decisions you make about your money will dictate your future lifestyle. How you choose to manage your money and your assets could be the most important decision you ever make.

By MICHELLE ONODA