How to Turn the Tables on Your Budget

How to Turn the Tables on Your Budget%0D

Ladies, it pains me to tell you that we are more confident in our ability to follow a budget than to invest our money and allow it to work for us.  A recent BlackRock study revealed that 61% of women follow a household budget but only 45% of women have investments.  What’s worse is that only 22% of women consider themselves as an investor.  So why are we so comfortable with saving money yet unwilling to get comfortable with a strategy for making it grow?  Here are four tips you can follow to turn the tables on your disciplined approach to budgeting and savings:

  1. Understand your risk – The risk of losing money is typically the number one reason why women choose not to invest. When you’ve heard a negative story from a loved one’s past experience you may be scared to dip your toes in the water.  However, keep in mind that your goal should be to build a portfolio that’s right for you and, in many cases, those bad stories were told by someone who was likely taking too much risk to begin with.  If you’re nervous, don’t lose sight of the fact that there are lower-risk investments that carry the potential to make you more than your savings account or CD at your local bank.  If you invest with the attitude that markets will be choppy, you have the option of building a more defensive portfolio that meets your needs.   My advice is to never take more risk that you are comfortable with and learn how different types of risk could actually affect you.
  1. Get educated – Another popular reason why I find women don’t invest is because they don’t even know what investing really means. It all seems so overwhelming – but it doesn’t have to be!  You should know the difference between a stock and a bond.  A stock is when you own a piece (aka, “share”) of a company.  The more shares you own, the bigger amount of ownership you have.  If the company you buy makes money, your stock price goes up and vice versa.   When you are buying a bond, you are actually loaning money to a company.  For instance, if you buy a bond for $1,000, you are handing over that money to the company with their promise that they will pay it back to you at a later date and, in the meantime, they will pay you a paycheck (aka, a “coupon payment” or “income payment”) until they return your money.  Now there are some more details you’ll obviously want to brush up on before buying a stock or bond, but it’s really not so difficult.  I can help explain these concepts to you and bring you up-to-speed on other things you’ll want to know if you’d like.
  1. Consider a systematic approach to investing – One of the easiest and most effective ways to invest is through a concept called “dollar-cost-averaging.” Don’t be intimidated by the name because it’s actually really simple.  The approach is to invest a fixed amount of money into an investment at regular intervals (like every pay period or every month).  By systematically investing the same amount each period you’ll spread your purchases over time, and your average buying price per share should be lower than if you had invested the money at one time.  This long-term strategy also takes much of the emotion and guesswork out of investing in the market.  It helps you avoid the most common mistake investors make by being tempted to jump in when the market is rising or selling out when the markets take a tumble.  Another plus is that it helps keep you on track toward meeting your long-term savings goals.
  1. Don’t set it and forget it – My grandparents used to use the “buy and hold” strategy and it really worked for them. These days, however, you must be looking at your investments and reviewing your strategy at least twice per year.  Markets move quickly and if you aren’t interested in keeping track yourself, you’ll need an expert advisor on your side who can do it for you.  I’m happy to review your current investments and give you some advice if you’re interested.

My name is Valerie Leonard and I’ve got a reputation for helping women invest using strategies that can help them reach their goals.  If you’re ready to learn more about gaining confidence and building an investment strategy that could help grow your money, contact me today.


Source: BlackRock Global Investor Pulse Survey, July/August 2015

Disclosure:  Dollar-cost averaging is not a foolproof investment technique. It does not assure a profit or protect against loss in declining markets. It involves continuous investment in variably priced units, regardless of price fluctuations. Investors contemplating the use of dollar-cost averaging should consider their ability to continue purchases over a period of time even when prices are low.

Securities and advisory services offered through Commonwealth Financial Network, Member www.FINRA.org/www.SIPC.org, a Registered Investment Adviser.  This communication strictly intended for individuals residing in the states of AL, FL, GA, KY, LA, MD, MS, OK, PA, SC, TN, TX. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.

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