Women can be the CFO of their families. My 4 steps to taking responsibility

Until recent decades, women have traditionally taken second place when it comes to managing money for their families. Even now, men are still often considered the breadwinners and financial decision makers in many conventional marriages. According to a 2021 study by UBS, half of married women push their husbands for financial decisions.

We are overdue for a change.

I am a personal finance coach and a national expert on saving for retirement in the US. I strongly believe that all women, regardless of income or financial background, should see themselves as the financial leaders of their family’s finances (if they want to).

Here are the steps to take charge.

1. Track your income and expenses

According to the American Consumer Council, women are the most powerful consumers, accounting for 80% of purchases in all categories, including groceries, new home purchases and online shopping.

If you’re already pushing most purchases, you’re familiar with expenses and receipts, which can help you create and manage your budget.

Given the ever-changing needs, it may seem impossible. But think of it this way: if you’re a mother, you’re likely to arrange for the care and education of your children. You’re probably planning meals and shouldering the burden of housework and cleaning. All these decisions require money to execute.

Estimating your monthly expenses is easy. However, if you want to make sure your family’s finances are on track, you’ll need to be thorough. List every expense, big or small, to understand your spending habits and spending habits. This can include gas, childcare and your cell phone bill.

Don’t aim for perfection. When you start, no two months will be the same. You may not know what all your normal expenses are until three months (or more) into the process. The longer you track, the more confident you’ll be in understanding your family’s financial picture.

My husband and I have been transparent about money since we got engaged. All our payments, rewards and income are recorded in our family’s financial ledger. We use Money from Microsoft, which allows you to track all of your money and goals, including your income, net worth, and expenses.

When you are ready to create a budget, remember that there is no right or wrong way. Think about what style works best for you and your family, and don’t be afraid to change if the first approach doesn’t work for you. Here are some methods to consider:

• Pen and paper: If you prefer visuals or journaling, a notepad can be an effective way to start.
• An online application or tool: I like and recommend You Need a Budget, and CNET editors recommend Rocket Money as two options to consider.
• A spreadsheet: You can design your own spreadsheet or choose a template. I love the one sold by @mywealthdiary on Instagram.

2. Take responsibility for your debt and savings

Once you have a budget, you can start looking at where your money is currently going and where it could go.

This can start with understanding how much you’re paying on debt, including credit cards. Collectively, Americans owe more than a trillion dollars in credit card debt. And it can be some of the most expensive debt, meaning credit cards typically accrue interest at a higher rate than many other debts, such as mortgages and car loans.

Read more: How to get out of credit card debt

While paying off debt is important, so is having an emergency fund to cover unexpected expenses — think a flat tire or a medical crisis. So how do you balance these priorities?

If you’re juggling debt and saving, try a twist on the avalanche debt repayment method, in which you prioritize paying off the debt that charges the highest interest rate while making minimum payments on your other debts. When the first debt is paid off, you would put all that money into the debt with the next highest interest rate, and so on.

3. Start investing for retirement

Women, on average, live to age 79, compared to 73 for men, according to the US Census. That means your retirement should last six years longer than the average man. But women are also more likely to shoulder the burden of caring for both children and the elderly, which can mean less time is spent contributing to retirement savings.

If you’re married, don’t depend on your spouse’s retirement fund to cover your retirement. If the unexpected happens, you want to make sure your financial future is secure.

If you have a job and your employer offers a 401(k), this is probably the easiest way to start saving for your retirement. Even if you can’t contribute much, any percentage of your pre-tax income can grow in one of these accounts thanks to compound interest.

If you don’t have a job that offers a 401(k), you can still save for retirement. If you are married and filing jointly, the non-earning spouse may have a traditional or Roth IRA. (It’s often referred to as a spousal IRA, but you’d just open and use a regular traditional/Roth IRA if you were employed.) You might also consider a taxable brokerage account, which is available regardless of your status of income.

4. Involve your spouse in financial decisions

Even with all this advice, don’t leave your partner out of your financial goals and where the money is going. I always recommend a regular chat called «Date Sexy Money». Try meeting with your spouse at least once a week for an hour to go over your budget, plan for the future, and take care of money matters. Aim to align on goals and habits and try not to focus on your differences.

So something new. There are no limits. And keep your ultimate goal in mind: a better money life for you and your family.