finance

8 financial essentials you should know by your 50s.

As a money and mindset coach, I constantly get told by clients they wish they had a better understanding of money much earlier on in their lives. This is inevitably followed by the question, “Isn’t it just too late for me to change?”

I can honestly say it is never too late to change your attitudes, beliefs and behaviours when it comes to money.

Only a short time ago I was in nearly $200,000 worth of credit card debt and struggling to come to terms with how I was going to every pay it off.

But I did – over a four year period, I made it my mission to not only pay off the debt, but to learn everything I could about money, from earning it, valuing it, using it, setting financial goals and spending it wisely. Though my own journey I’ve distilled what I consider the 8 must-know things about your finances by the time you are 55.

Queen Latifah, Diane Keaton and Katie Holmes in Mad Money. Image: Tumblr.

1. Fairytales don’t necessarily come true.

Many women, particularly Baby Boomers, were raised on the belief that they would have a partner who they could rely on financially. We all know that unexpected life events happen all the time, from divorce to changes in health, so it’s time to let go of outdated beliefs and start taking financial responsibility for your future today.

2. Equip yourself with money skills.

If you haven’t already, face the real numbers in your financial situation. Talk to a financial planner about your lifestyle and what you need to retire. Do an honest assessment of what you need to comfortably retire and start planning now.

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Get up to speed with government information sites and free resources available to get your retirement planning started. Check out moneysmart.gov.au and use their retirement planner and other online tools and resources or access free information and support at humanservices.gov.au.

3. Men are from Mars, women are from Venus.

There are multiple societal factors that can lead to women being less prepared for their retirement than they would like to be and one of those is negotiating. Men negotiate on a more regular basis than women and have often been societally conditioned to ask for whatever they want.

Women, on the other hand, are less confident in negotiating, or unaware it's even an option. Regardless of your age, or occupation, negotiating for more money is a key strategy in changing your financial future.

4. Get better at negotiating.

Many women inherently struggle with asking for a raise or promotion because culturally and historically women have been lead to under appreciate their worth and therefore don’t feel their work and contributions worth as much as their male counterparts. Understand the skills and steps needed to negotiate for more money. Here are Alice Crawley’s core negotiation principles:

1. Get clear: find your WHY and your wants
2. Know your ask - define your goals
3. Prepare and strategise for success
4. Communicate with confidence
5. Deal with rejection, pushback and roadblocks
6. Pull it all together. Taking action + momentum = successful outcomes

5. Clear the clutter.

By the time you are 55, it’s easy to accumulate mountains of paperwork. It’s time to clean the clutter.

Only hanging onto documents that are absolutely necessary. For example, if you’ve already filed your income taxes, get rid of old statements, bills and other financial records after a 5 year period. It you still think you may need to refer back to this information, just scan or make a digital copy of the record - then get rid of it.

6. Use it or lose it.

Another potential financial headache can be “excess accounts”. By that I mean the bank accounts you rarely use, or superannuation accounts from previous employers that should be rolled over. Make a list a list of accounts that you never use and shut them down and roll over your super - it all adds up. The financial spring clean will feel invigorating.

7. Understand what makes you tick.

By age 55 you most probably have a good sense of who you are and what you want out of life. However, many of us will also enter a period of reassessment as our lives change through big life events, like grandchildren entering the mix. Acknowledging your unique skills and the value you offer the world helps you think about your own self-worth and contribution to the world.

8. Finally, turn the bucket list into a plan.

Many of us have hopes and dreams of things we want to achieve in life. Now is the time to detail all the things we want from life and to actually plan when and how we are going to achieve this. Having your finances in order and a plan for the future is the first step in making the bucket list a reality.

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Did you know ...

Westpac's Retirement Readiness Report for 2015 found women on average have $268,000 in their retirement fund versus their male counterpart who have $413,000. This is likely is due to a range of reasons including taking time out of the workforce to have children, care-take family members or communities, housework, looking after the home and not negotiating for more money throughout the course of their careers.

Alice Crawley. Image: supplied.

A staggering 84 per cent of Australia women included in this survey did not feel sufficiently prepared for retirement and another 23 per cent said they did not feel they were prepared for retirement at all. And 84 per cent of women in the survey were concerned about their ability to maintain their desired standard of living during retirement.

This report also found that 2 in 5 women don’t consult anyone regarding their retirement financial planning and over a third of women seek advice from a source who there have a personal relationship with.

The results of this report indicate that it is more important than ever for women to seek professional advice as early in their careers as possible about their retirement plans and to set clear financial goals.

Alice Crawley is a money and mindset transformation coach to help women transform their personal relationships with money to live wealthier, more wonderful lives. Unlike budgeting services and websites, Alice Crawley helps women redefine their relationship with money, which is the most common roadblock to long-term financial freedom. You can find Alice on Facebook, Pinterest, Instagram, Twitter and her website.

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