Our grandmothers had their pin money. Our mothers clipped coupons. But did they take the steps necessary to secure their financial futures? All too often, women handled the day-to-day finances, but left investing decisions to their husbands. While this may have worked out for some women, many others learned the hard way that their family's nest egg never hatched and, as a result, lived their golden years in financial hardship.



Between Generations

Those of us who were born in the late 1950s and 1960s didn't make it into the Baby Boom generation and yet we pre-date Generation Xers. Just as we're betwixt and between generations, we women are often stuck in terms of our personal finances and financial planning. We're not the solid savers that the Boomers are, yet we're not the spendthrifts that the Gen Xers are often made out to be. Intellectually, we know better than to rely on the men in our lives to secure our financial futures, yet we're often almost paralyzed when it comes to investing.

The Facts About Women and Retirement

The cold, hard truth is that almost all of us (90 percent is the estimate) will, at some point, be alone in managing our finances. Perhaps we'll never marry, but the chances are greater that we'll get divorced or face widowhood. Retirement may seem far off, but if we plan to retire when we're 60, we'll most likely live at least another 20 years. If Social Security is still solvent when we retire (a big "if" by many estimations), we'll only get about 30 percent of our annual income from Social Security. That leaves a gaping hole that needs to be filled.

Don't Play Chicken Little

As women approaching a certain age, it's sometimes easier to fret about the future than to actively plan for it. That's especially true if we don't already have tens of thousands of dollars tucked away for retirement. The reality is, though, that Prince Charming won't come sweeping in and take care of our finances for us. Just as we've become empowered in other areas of our lives, we have to take the power to create our own financial futures.

Steps to Financial Empowerment

When it comes to women taking control of their personal finances, the first thing is to deal with the here and now. We need to understand how much money we make and where it goes. For a month, keep a spending diary. You'll gain a wealth of knowledge about your spending decisions and priorities. Next, look at your debts - particularly credit card debt - and make a plan to become debt free. You can go on a spending diet and put the money you save toward reducing your debt, you can ask your creditors to reduce your interest rates, you can take out a home equity loan to rid yourself of consumer debt, and so forth.

Once you have a handle on the current state of your personal finances, it's time to start planning for retirement. Explore a variety of options for saving, including employer pensions, 401Ks, IRAs, SEP accounts, and so forth. You can read up on your options, consult a financial advisor, or both. You should also use a calculator (available online) to determine how much you need to save each month in order to create the nest egg you'll need.

Keep in mind that women tend to make very conservative investments, so be sure to choose investment instruments that are within your comfort zone, but that will most likely generate returns that outpace inflation. Finally, don't be discouraged if you've procrastinated and are behind the curve when it comes to investing. At an eight percent rate of return, even an investment of $50 a month can grow to almost $30,000 over 20 years.

That's the kind of return that would make mom and grandma proud.