Happy New Year! As we enter 2014, we want to help you make this the best year yet. We know that finances play a huge role in your life, which is why we are sitting down with financial experts over the next few weeks to hear what they have to say about financial planning, some financial mentoring, and making the most of the new year.
Today, we are hearing from Mary Hunt, founder of Debt-Proof Living and the author of The Smart Woman’s Guide to Planning for Retirement (Revell, 2013). We asked Mary what the single most important thing to do this year is, in regard to financial planning. Read on to hear her answer.
4word: Retirement is a loaded word. How can women push past the fear and uncertainty associated with retirement?
Mary: You’re so right, “retirement” IS a loaded word—loaded with emotion, myth, fear and for some of us, terror. And left to themselves, those emotions do not lessen with age—they become more intense.
Retirement for me meant pre-death, the Final Act. I’m sure each of us has a different idea of what retirement means, but from what I am learning, it is not usually a pleasant thing.
The way to push through fear and denial is to embrace truth. That means giving up our fantasies that we will never age, that the government or our husbands will take care of everything for us. It means moving out of denial and into the light of God’s truth. He gives us just one day at a time, no matter our age. We are not to worry about the future, but to be good stewards of the health and wealth he gives us today.
Statistically, we know that as women we will outlive our men. We have to prepare for the time that we will be on our own—our sole source of support. That’s the truth.
4word: Is it enough to invest in a 401k (or similar plan), or do women need to be actively pursuing other retirement preparations?
Mary: Funding tax-advantaged retirement accounts like 401(k), IRA, Roth-IRA and so forth, is just one of the six strategies I recommend in “The Smart Woman’s Guide to Planning for Retirement.” The other five strategies are equally important because you sure do not want all of your retirement assets in one basket that is being held by the government.
Until you withdraw those funds in retirement and pay the taxes on them, those accounts technically belong to the government. The rules can change at anytime and for any reason—without your consent or permission. That’s why you also need: a money-management plan, a solid emergency fund; you need to free yourself of all unsecured debt, to own a home free and clear of any mortgage by the time you retire and have a personal investment portfolio. Don’t panic. All of these strategies are easily in any woman’s ability provided she starts as soon as possible. And the younger you are when you get going on this, the easier it will be.
4word: What is the single best thing that our readers can do in 2014 to prepare for their financial futures?
Mary: Get out of debt. Debt steals your options and robs from your future. It keeps you in bondage, always living in the past. As long as your are carrying the worst kind of debt (credit-card debt followed closely by student debt), you will find it nearly impossible to get on track with achieving the six strategies.
Start by attacking your credit-card debt. And I mean with a vengeance. Get a plan then stick to it. Start knocking these debts out cold even if that means working a second (or third?) job.
4word: How does our attitude towards debt, finances, retirement, etc, need to change?
Mary: Oh that first one—debt—is the biggie. Our culture has made consumer debt appear to be such a great way to have all we want now and just pay for it in the future. That is a lie I believed for many years and it got me into a lot of trouble.
The truth is that debt presumes on the future. When we buy things now planning to pay for them later, we assume we will have a job, health and more than that—the desire to spend our future income that way. We make an arrogant presumption on God’s mercy—that he will provide the means in the future to pay for things we demand to have now.
Debt keeps us in bondage. I’ve been there. I know what that feels like and it doesn’t feel good.
Our attitudes about saving for the future need to change from “optional” to “mandatory.” Just like withholding for taxes from your paycheck, retirement saving needs to be a mandatory. No options, no excuses. A change of attitude is all that needs to happen there to make it a reality.
Here’s the bottom line: We need to become the best stewards we can of the things that God entrusts to us on a daily basis. We plan, we prepare. Then we turn it all over to the Lord trusting him for the outcome.
There’s no better time than the present to begin securing our futures. What financial behaviors do you need to change in 2014?
Have you learned to manage your money and make it work for you? Would you like to help other professional Christian women learn these same skills? Become a mentor today! The deadline to register is January 10.
For more personal finance advice, connect with Mary on Facebook.