Why It’s OK To Miss (or Skip) Conventional Financial Milestones
The comparison trap can often lead us to believe we’re falling behind when it comes to reaching financial milestones, such as buying a house or earning a six-figure salary. But the truth is that every person’s timeline is unique, and it’s totally fine to achieve these milestones later than you initially anticipated you would — or never at all. In this “Financially Savvy Female” column, we’re chatting with Eleni Patel, a CPA with Equitable Advisors, about why you shouldn’t hold yourself to a specific time frame for meeting certain financial goals and which milestones are OK to skip altogether.
What are some common, conventional financial milestones that women feel pressure to meet at certain points in their lives?
After school as women enter the workforce, we see women feel pressure to be debt-free from student loans and credit card payments. As they become more established in their careers and start families, most women strive to be homeowners and have enough saved for a down payment.
Many women also prioritize saving for retirement, usually through an employer-offered program, but are not sure how much to contribute based on their age and financial situation. Some women leave the workforce to raise children and have limited access to a retirement plan. Some are unable to contribute to a basic IRA or Roth IRA if their partner is making too much money.
As caregivers, we often see women feel pressure to fully cover their children’s college educations. Women also feel the need to support aging parents, as well as adult children. In general, most women are focused on achieving the feeling of not having to worry about money, or feeling financially secure, but do not have as much control or confidence to gain that feeling.
Why is it OK — from a financial professional’s perspective — to miss some of these milestones?
Financial success should be measured by the goals and milestones you set for yourself, not by the social norms that others have put out. Each person’s financial situation and goals are unique, and everybody has a different starting point, making it impractical to set blanket goals for everyone to hit by a certain age.
The first step is setting your own goals based on where you are today and where you want to be in the short term and distant future. Second, and most important, is that it is never too late to start financial planning. You have more control than you think over your earnings, expenses and savings. You can make substantial progress when committed to a plan that targets the achievement of a goal.
Are there some financial milestones women should not miss?
No two financial plans, goals or paths are the same, which is why it is difficult to set financial goals that apply broadly to all women. For example, the amount you need saved for retirement is based on many factors, including the type of lifestyle you have today and hope to have in retirement, and this varies greatly person by person. The most important part of the journey is to take the time to set and communicate your financial goals, and then craft a plan for achieving them. Also, remember to be flexible and adjust your plan because life happens. As your life changes and evolves, so too should your financial plan.
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
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