Advice to Women Social Entrepreneurs Who Want to Manage Their Money Wisely

As women social entrepreneurs, we have a sense of personal and social responsibility that needs to be reflected in the way we manage our personal finances. Doing good starts â€Ŕat home,†taking good care of our money by making wise financial decisions. These wise choices will allow us to create financial stability in the present and our financial independence in the future. Furthermore, we will be able to create sufficient wealth to take care of ourselves and to share part of our wealth with others. So, what steps do we need to take to ensure that we are managing our money wisely?

Step 1: Connect with your â€Ŕhigher self†and get clear about your values and priorities. Define clearly what is important to you, which determines how you will spend your money. As wise women, we will understand how much is â€Ŕenough†and shift our focus away from excess consumption and accumulation of things we do not need to be truly happy. This first step is critical as it will determine our financial goals. You may wish to heal your relationship with money as you go through this first step. Go to the â€ŔResources†section of Sabia Partners for suggested readings.

Step 2: Clarify what you want your money to do for you now and in the future. In other words, write down your short term (less than two years), intermediate term (2-6 years), and long term (over 6 years) financial goals. These goals need to be specific and measurable. For example, a well drafted financial goal would be the following: â€Ŕto accumulate $20, 000 in 3 years for a down payment of my primary home.†Another example of a well written goal: â€Ŕto pay down $5,000 of credit card debt in 12 months.†And a third example: â€Ŕto build a reserve fund of $6,000 in 18 months.â€Â

Step 3: Acquire a basic understanding of credit, stocks, bonds, mutual funds, real estate, insurance, mortgages, and financial planning. Most women do not know what they do not know about money, particularly investment vehicles and strategies to accumulate capital. This lack of basic financial and investment literacy does not make it possible for you to ask the right questions before executing a financial transaction. In most instances, a commission-based financial advisor (more a salesperson than advisor) will be offering you the insurance or investment product. Unfortunately, in too many instances, these representatives are either not well trained or are more interested in their commission than in your interests. With proper financial knowledge, you will be in a better position to protect your income and assets by asking the right questions and making well informed financial decisions.

Step 4: Hire a fee-only Certified Financial Planner with at least 5 years of full-time experience in personal financial planning. A good place to start your search is the Garrett Planning Network. The planner selected should be a Registered Investment Advisor (RIA) with the Securities and Exchange Commission and with your state of residence. There should be great affinity with this planner as he/she will be a very important person in your life. The relationship needs to be open, respectful, and based on total trust. If it does not feel 100% right, move on and interview other candidates until you find the right financial planner for you.

Step 5: Follow your financial planner’s recommendations throughout the financial planning process. Give him/her all data needed for your financial analysis and when your plan is completed, have your questions answered and start implementing recommendations as soon as possible. Only by implementing your individualized financial plan, will you experience the joy and peace that comes from knowing that you are managing your financial resources as wisely as possible. You will be on your way towards achieving your financial goals and will feel the power that is present when you know you are in control of your money and your life.

Source by Carmen

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