Many women have told me that they are “terrible” with their finances. They say they are just “not good with numbers” or they have no idea how to set budgets, make investment decisions or get a mortgage. For whatever reason, many of us have felt this, myself included. The funny thing is, learning how to manage your finances is actually not that hard. You just need a bit of time, and a bit of help.
The great thing about navigating the big bad financial world is that it’s not that big or that bad because there is always someone there to help you. Oh, and the more money you have, the more people you will have access to.
5 Things You Need to Know to Manage Your Finances
Finances Step 1 – Use your resources
Next time you go into a bank branch, look at the super-busy looking people sitting in the offices around the perimeter. Did you know that bank branches have Financial Services Representatives who are there to help you with Financial Planning, Retirement planning, Budgeting, Investing and all types of Lending?
If you have never done so, and you need help in one of these areas, make an appointment with one of these trained professionals. Their services are complimentary, and they have access to computer programs and processes that can really help you. These people are very approachable and great at explaining concepts and products.
If you don’t want to go the bank route, reach out to a mortgage broker, a Certified Divorce Financial Analyst, an accountant – just reach out! Google! Find the people you need.
Finances Step 2 – Understand your monthly budget
Another thing to do to gain a solid grasp of your financial situation is to complete a monthly budget. Whether you are married, separated, divorced or single, leaving all of the “financial stuff” to someone else shouldn’t be an option. If you don’t have a grasp of your finances, how will you know what you (or your family) can afford to buy, save, or vacation with, all without piling on the debt.
At some point in our lives, whether it’s due to divorce, death of a spouse, being single etc. or any other life event, we will become responsible for our own financial well being. During this budgeting process, you will learn a lot about yourself. Seeing how much money you are earning against how much money you are spending on bills, food etc. will show you a realistic picture of where you’re at.
If your reality is looking great then you have a lot of options but if it doesn’t look so great, you still have lots of options—to help you get into a better financial situation. The important thing here is to complete a monthly budget.
Finances Step 3 – Should you Rent or Own?
Many women in the throes of divorce ask whether they can afford to keep their matrimonial home, what they can afford to rent if they sell, and how the overall impact of the divorce will affect their financial life. Whether you plan to stay in your current home or to buy another property, you need to know what you can afford. Although there may be a discrepancy between the ideal situation and reality, when you understand your numbers, you’ll be more in touch with the impact of your decisions on your finances.
Getting in touch with a mortgage broker can help you to understand your numbers. In contrast to a more general pre-approval, mortgage brokers actually “pre-qualify” you for a mortgage, meaning they work with you to determine exactly how much you will be able to afford to either keep your current property or to purchase a new one. This will remove any surprises down the road and give you more control over your situation.
Finances Step 4 – Get a handle on what you owe
Your monthly budget will reveal what you owe. The numbers are your reality; you just have to face them. Beware though, this experience might feel like stepping on the scale after you binged your way through the holidays – yikes! You just have to face the number, and elastic waistbands or stretchy yoga pants will not be able to protect you from your reality anymore. But again, once you understand exactly what you are dealing with, if it looks bad, you can always get help to design a plan and better your situation.
Additionally, keeping your credit manageable will help with buying a home. Lenders carefully examine your credit, your credit rating, and the total amount of credit you have access to.
Step 5 – Enjoy working with advisors
Whichever resources you use to help you—be it a mortgage broker, a banker, a financial advisor, a real estate agent—make sure you like this person. Too many clients feel that their resource person doesn’t listen to them or doesn’t explain things to them or makes them feel like they just want to “sell” something.
Remember, these people are working for you and you have the right to ask for what you need. Ask them to explain something if you don’t understand, and if you aren’t happy, speak up. When you feel comfortable with someone, it is much easier to learn what you need to learn to achieve your goals and make the best decisions for you and your family.
Rebecca Griffith is a Mortgage Agent / Mortgage Advisor with Streetwise Mortgages who heads up the Divorce and Separation Mortgage Financing Solutions practice. She has an MBA in Finance, is a Certified Divorce Financial Analyst, and has more than 20 years of experience in Wealth Management, Strategy, Private Banking and Management.