Contributor: Kristen Fricks-Roman
Company: Morgan Stanley Wealth Management
Title: Financial Advisor
As mothers, daughters, wives and career professionals, we live busy lives. As a result, we often put off taking care of ourselves and that includes our financial well-being. However, it’s more important now than ever to understand our personal finances as we are part of a growing economic force. Currently, women account for nearly half of U.S. wealth creators and two-thirds identify themselves as primary financial decision-makers, not just influencers.
Here are important key behaviors that can influence your overall financial stability.
4 Key Behaviors that Contribute to Financial Success
- Income vs. Expense. Keep on top of what you and your family are earning and what you are spending. This includes creating a realistic budget that affords you the opportunity to review your personal savings plan. Also establish your top financial goals such as saving for your children’s education or funding a second home. To achieve these goals, determine how much they will cost and when you plan on paying for them; then calculate how much you should set aside each month. Don’t leave it to guessing, know your budget.
- Review the terms of your existing debt. This may include your mortgage, college loans, personal loans (such as a car loan) and credit card balances. Review and understand the terms of your debt including the interest rate, the number of years before the debt is retired and whether refinancing or consolidation is wise. Also, if your overall percentage of debt to income is climbing, make plans to adjust this number to better fit your income. It’s important that you are not stretched beyond your means – combined monthly housing costs and personal debt payments should not exceed approximately 36 percent of your gross monthly income.
- Pay attention to insurance. Monitor your insurance coverage and make sure it’s adequate. This includes insurance for your life, car, health and possibly even long-term care. If your family dynamics have changed, did you adjust your life insurance coverage as well? If your net worth has increased, have you looked into an umbrella policy? If you chose a high deductible health insurance policy, do you have enough in savings to cover your deductible? These are all questions you’ll need to ask yourself.
- Engage with your retirement and personal investment resources. This includes making sure you are putting the right amount away in your employer-sponsored retirement plans or individual retirement accounts and are aware how those funds are invested. If you are working with a financial advisor, make sure you are in contact on a regular basis so they are aware of any changes to your career, family and lifetime goals. This will ensure that your investment strategy best reflects your current situation.
It’s important to take the time to focus on your finances. Schedule it on the calendar if it helps because by taking a few key actions today, you will have better control of you and your family’s financial success and future.
Insurance products, including annuities, are offered in conjunction with Morgan Stanley Smith Barney LLC’s licensed insurance agency affiliates. Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. All guarantees are based on the claims-paying ability of the issuing insurance company. Principal value and return of an investment will fluctuate with changes in market conditions.
The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.