Empowering women to be smart investors who are confident about their money is a topic that Diane Bourdo, CFP®, is well-known for being passionate about. Moneygeek invited her as an expert contributor to advise on ‘The Women’s Guide to Financial Independence.’
In this article, Bourdo explains the difference between saving and investing and recommends mastering the basics for women new to investing. Financial planning can seem like a broad and overwhelming topic, but focusing on these three simple ideas can help to break it down:
- Pay yourself first
- Manage your debt
- Track your expenses
Bourdo discusses in more detail the importance of these three ideas, particularly the difference between ‘good’ debt, such as a mortgage loan and education funding, and ‘bad’ debt, such as credit card debt and personal loans. To avoid bad debt, Diane recommends creating an emergency fund, using a debit card or paying your credit card balances monthly, don’t be without medical insurance, limit financing to four years, pay 20% down, and don’t buy more cars than you can afford. You can also take steps to manage your debt by making a list of what you owe and setting up a plan to pay it down. The article then highlights the importance of tracking your expenses to become aware of your spending and help to progress towards your goals. Many online apps can help with this task. Don’t forget to set goals and celebrate your achievements!
When advising women how to start investing, Diane recommends they think about their learning styles first and use that information to access many resources such as videos, books, webinars, and social media accounts focused on educating women. Particular recommendations are Ellevest, an investment platform designed specifically for women; Alice Finn’s book, ‘Smart Women Love Money’ and following these Instagram accounts: The Financial Diet, Dow Jones, Women’s Money Lab, and Ladies Get Paid for short videos and workshops. Lastly, the National Association of Personal Financial Advisors (NAPFA) has a great website to find an advisor, educational information, and general guidance.
In discussing the barriers women face to investing, Bourdo says she regularly sees smart women say, “Oh, I’m not good at this; I’m not good at money.” She notes that part of the problem is the cultural narratives fed to women by our dominant culture and how the perspectives and preferences of men impact how financial institutions serve their clients. To combat this self-doubt, Bourdo recommends that women ask themselves these questions:
- How much is due to externalities such as system design?
- How much is due to external cultural messaging?
- How much is due to our inner critic?
Diane focuses on encouraging women to redefine success to see themselves as being ‘good with money,’ shrug off the norms, and move forward with confidence and enthusiasm.
The Humphreys Group is a women-owned and women-operated wealth management firm based in San Francisco, California. The firm offers highly focused financial planning and disciplined asset management to a range of clients. Their expertise is helping women in transition navigate their particular challenges — such transitions as marriage, divorce, widowhood, inheritance, or that first stock option grant. Their passion is helping their clients take control of their own financial lives and get smart about money.
