CLIMBING THE LADDER
Modern Financial Decision-Making and
RETHINKING MONEY By Lauren Welch, Delta Psi and Accredited Financial Counselor (AFC)
T H E AN C H OR
25 F AL L 2018
Financial responsibility in modern households and other scenarios looks vastly different than in years past. Overall, women are waiting longer than previous generations to get married, live with significant others, and have children. More and more women are making major financial decisions on their own. For women who are married or in committed relationships, it is now more common for women to be the sole breadwinner. There is also a difference in the way money is managed in a household, as women take on more financial responsibility or are solely responsible for the family budget. Because of these changes, as modern women, we need to start rethinking money.
WHAT DOES YOUR BUDGET LOOK LIKE? Often, financial decision-making is seen as difficult and too complicated, when it doesn’t need to be either. One of the most important financial tools to use (and the one most dreaded!) is the budget. Creating a budget helps set the stage for your goals, both over the short- and long-term. A budget helps you put savings first by putting a name to each dollar you earn. Once you have worked out a preliminary plan, you can work (and rework) it. There are a handful of free budget apps for your phone, as well as templates you can find on the Internet. Setting a realistic budget will allow you to think big picture and create long-term plans around your financial goals – such as paying off debt, or saving and planning for retirement, vacations, and vehicle purchases. In my years of experience helping people with their financial situations, the first question I always ask is, “Do you have a budget?” Almost every time, the answer is no. The lack of a budget is the biggest cause of financial challenges.
WHAT ARE YOUR NEEDS VS. WANTS? An important concept to keep in mind is needs vs. wants. You need a car to get to and from work, but you want an expensive brand new one. You need to eat, but you want to go out to a fancy restaurant. Your needs might be different than your partner’s, and you might differ in opinion about what constitutes a need rather than a want. It’s important to recognize this before starting a financial conversation.
