American women today are playing financial catch-up — and they're winning. Whether young and starting their first jobs; re-entering the job market; or recently widowed, women are starting to prepare for their financial future. They're learning that if they want to travel the road to financial security, they had better learn to map the trip themselves.

Why is financial independence so important? Unfortunately, many women still leave the financial responsibilities to their husbands, or even worse, face a crisis before they are ready to take the reins, leaving them unprepared to handle their financial affairs. "Ninety percent of all women, either through divorce, widowhood, or because they have never married, will be in charge of their own finances at some point in their life,” according to FYI Online, by investment advisors Waddell and Reed, in a 2007 article on About.com: ”Overcoming the Financial Gender Gap.” http://financialplan.about.com/library/weekly/aa060299.htm

"Women are in a unique financial situation," explains Boston-based New York Life agent and NYLIFE Securities registered representative, Carol B. Gray. "They usually earn less and live longer than men. Plus, they may not have been taught to take control of their money." Women earn approximately 77 percent of what men earn to do the same job, according to 2005 US Census Bureau statistics. They also take approximately 12 years off to raise a family or care for aging parents, according to Kiplinger’s Personal Retirement Guide for 2004, which cuts into their pension savings. Finally, women on average live seven years longer than men, according to “Marketing to Women” by Marti Barletta, 2006. For women, this makes taking control of their financial situation even more essential.

Unfortunately, a March 2006 Women and Company survey indicates that 58 percent of women do not review their financial situation. In addition:
*only 42 percent of women surveyed periodically review their savings, investments, retirement plans or insurance policies
*fewer than 16 percent (15.62 percent) of women responding to the poll have formed a financial support network (financial advisor, CPA, attorney)
*just over 13 percent (13.45 percent) have executed a will, living will and healthcare proxy
*and approximately 11 percent (11.43 percent) have prepared for their long-term needs

Mistakes some women make in their approach to managing money:

• "I don't know where to begin.” In 2005, a nationwide PNC/Harris Interactive survey of nearly 1,500 adults found: "Women, despite their concern for stability and financial security, are less likely than men to take steps to protect their wealth,” according to a March 2007 article, “Women in Business: She Works Hard for Her Money, So She Better Use it Right,” by Megan Dow, Fox News.com
• The "Prince Charming" myth. Historically, "women tend to abdicate responsibility to their husbands, their brothers-in-law or financial professional," says Gray. "They do this as opposed to taking full responsibility for their finances. They figure someone will help them."
• "I think men invest to grow their principal, and women invest to protect it." Explains Gray: "I find women tend to be savers, less willing to take risks, while men invest to grow their principal; women invest to protect it." As a result, they often don't get the kind of returns they need to build wealth.

Following are ten steps that will help you take control of your financial future:

1. Let knowledge overcome fear. "Knowledge is empowerment," explains Gray. "The more you learn about preparing for your financial future, the more confident and the more successful you will become." Start by attending for-women-only seminars on finances, reading books, studying concepts, and attending adult education mini-courses. And don't forget that sites (such as this one) contain a host of financial educational material.
2. Manage your cash. Get your income and expenses in balance by setting up a workable household budget. Also, put away the credit cards. This will put you in control of your spending and help you identify money you can send ahead for the future.
3. Find good professionals and work in partnership with them. Nobody has to go it alone. There are professionals who can provide information, insight and recommendations to help you identify and achieve your objectives. The key is objectivity. Find someone who is knowledgeable and with whom you are comfortable. Explains Gray: "Look for someone who listens and recommends rather than dominates and tells." Remember, it's your money, so final decisions are up to you. According to a 2007 oppenheimerfunds.com study, 64% of women are more knowledgeable because of working with a professional.
4. Establish goals. These are blueprints based on your vision of the future: sipping coffee in your beachfront sun room at age 65; watching your children or grandchildren graduate from college debt-free; a trip to Europe paid for by the golden eggs from your retirement "goose." To help achieve these goals, you'll want to start saving as early as you can, and save for as long as you can. Keep your own savings and retirement accounts, even if you are married. Once you know what you want, you can begin to plan what it will take to achieve your goals. A good professional will work with you to help you quantify your goals and develop a strategy to help achieve them.
5. Identify your "risk tolerance." This is your comfort zone for investing. It can range from ultra-conservative to highly aggressive. Avoid investments that make you ill-at-ease. Stay within your comfort range. Some professionals call this the "sleep test" — if your investments keep you awake at night, your money is in the wrong place. Work with your professional to determine your current risk profile.
6. Whether you are married, single and working with a professional, do not abdicate financial responsibility. Make building wealth something you do together. If you are married, warns Gray, remember "there are no guarantees. Your husband could die or leave. Get involved."
7. Don't shy away from tough choices. Sacrifices you make today can help pay for a solid standard of living tomorrow. Consider allocating a portion of your income — many professionals recommend between 5% and 10% of your take-home pay — for the future. What to do: Consider paying yourself first. When you write checks to pay your monthly bills, write a check to your chosen accumulation vehicles or, if available, payroll deduction.
8. Take your time. New York Life agent and NYLIFE Securities registered representative Kevin S. Odell, says: "Invest a little at a time to get your feet wet. This creates experience and confidence."
9. Protect your value with disability* and life insurance. Asks Gray: "Do you feel your life is as valuable as a man's? More to the point, if you died, what would be the impact on your loved ones? Whether you are a homemaker or your household's sole support, your death or disability could have a tremendous financial impact on your family." Protect that value with insurance. Currently only 40% of women own individual life insurance, and one in three have no coverage at all according to a 2007 LIMRA International press release.
10. Pass it on. If you have a daughter or son, educate her about money, so the next generation can avoid the frustrations you may be experiencing.

Many people — both men and women — find preparing for their financial future boring. Learning about it and then practicing what you learn can take discipline. However, the knowledge you gain and apply is one of those must-do things that is well worth the time. Or in the words of New York Life's Carol Gray: "Just do it. You'll be glad you did."

* Disability Disclaimer: Products available through one or more carriers no affiliated with New York Life, dependent on carrier authorization and product availability in your state or locality.

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