Karen Clark’s father was an accountant, so she grew up in a household where money, banking, budgeting and saving were talked about openly throughout her childhood. Because of this, Karen, who is a senior vice president and private banker with FirstBank in Nashville, says she was never intimidated by money. But she knows that’s not the case for many women, so she has some great advice about where and how women can start saving and investing in their future. She recommends starting early, starting small and taking ownership of your financial future, even if you have a spouse who may be making many of the financial decisions.
“I think it starts with parents talking to their children at a young age about money, budgeting and saving,” Karen says. “Children need to learn early on that you don’t spend money you don’t have. I don’t think a lot of families think about this.”
She recommends having children start a small savings account and then give them an allowance, of which a portion goes into the savings account. “If they want to buy something, they have to work for it. This teaches children you don’t just buy something because you want it. Teaching them wants versus needs is a very simple, but very important thing. You have to pay for your needs first, and your wants come later.”
If you didn’t start young, Karen says it’s never too late to start thinking about your financial future. Even for adults, getting started can be simple and doesn’t have to be intimidating. She says start a savings plan and contribute to a 401K if your employer offers it, or explore other types of retirement planning.
“Most employers are encouraging young employees to begin contributing to retirement plans,” she says. “Many individuals start savings plans with some of the plans online, such as ’52 Weeks to Savings,’ which helps to be disciplined.”
Karen sees all too often that women feel they need to wait for a life event before they start saving. Maybe it’s marriage or having kids. “I think you should start with your very first job and put a small amount every month in a retirement plan and a savings account. Treat it like one of your bills and just train yourself to put it in there every month.”
Later in life, Karen says the biggest financial mistake she sees women make is not knowing where her family’s investments are. Too many women let their husbands handle the financial decisions and never get educated. “I saw a statistic the other day that said more than 90 percent of women will be handling their own finances at some point,” she says. “The life expectancy for women is still longer than men, so I do think women need to be prepared, because there is an extremely high chance you will be handling your own finances for one reason or another. You can’t think that when you are 50 or 60 you will figure it out. You need to figure it out now.”
So where’s a girl to start?
Karen says there are really only a few basic things you need to understand at first, such as 401K and other retirement plans, insurance policies and social security. She says the Social Security Administration has a wonderful resource on their website called “What Every Woman Should Know” that is full of great information.
“Other than that, I recommend women have a general understanding of any assets or real estate they may have and a basic familiarity with the stock market,” Karen says. “Things like stocks, bonds, mutual funds and the Dow are important, and those are things you can read up on easily.” She adds that you don’t have to become an expert on all facets of investing — leave that up to the professionals. Just like when your car needs new brakes, you take it to a mechanic for repairs instead of trying to replace the brakes yourself.
Karen relies on her go-to investment guru for advice on all of her financial questions and recommends everyone have a solid resource. “Everyone needs a resource they can talk to,” she says. “If you hear about a new fund or are considering a real estate investment, ask him or her about it. I don’t know all the answers, so I’ve tried to build a team of people around me that I can ask the important questions.”
Regardless of whether you are starting a small vacation savings account for an upcoming family trip or trading Bitcoin online, setting aside time in your day to think about your finances and talking to trusted resources for solid advice are the building blocks of a winning portfolio.