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Helping Women in Transition Make Sound Financial Decisions | People

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Helping Women in Transition Make Sound Financial Decisions
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Helping Women in Transition Make Sound Financial Decisions

A Woman in Transition is a woman who finds herself bracing for a new phase in life.  “Transition” is not just a change in routines, relationships or social status – it is a fundamental shift in a woman’s identity.  It could be brought on with purposeful intent, such as voluntarily retiring from a successful career, or entering a second marriage.  It could be brought on by an unexpected surprise, such as losing a spouse to a heart attack, or becoming single after a painful divorce.  For a Woman in Transition, the uncertainty of the future can result in anxiety and fear and/or excitement and anticipation.

Examples of Real Life Women in Transition

Anne had supported her husband all her working life and had even put him through a PhD program when they first got married.  When her company downsized four years ago, she, at 54 years old, together with Steve decided that she would take early retirement and let Steve support her for the first time.  Anne enjoyed her well-deserved time off by growing exotic orchids, taking spontaneous trips abroad and attending series of concerts until Steve informed her that he “could not do the married thing anymore.”  She was completely surprised and heartbroken.  Some days, she decided that further financial entanglement with Steve would paralyze her and she would be better off taking whatever he was willing to give in order to get the process over with.  Some days, she made demands to ensnarl the negotiations with Steve just to get even.  And on other days, she was more worried about jeopardizing the outside chance that they might reconcile.

She loved and missed her old life with her orchids and morning coffee in the sun room.

Should she ask to keep the house?  Or sell the house and take a part of the proceeds in lieu of alimony?  Should she negotiate for a portion of his pension?  Or should she ask him to continue her medical coverage until she turned 65?

 ***

When Jane lost her husband on a tennis court on a bright spring afternoon in 2005, the shock was almost too great for her to feel real.  She knew she would most likely have money to live on because they had been living very comfortably in retirement for the past three years.  Her husband, John, had handled their personal finances well enough to fund their oldest son’s education, both undergraduate and postgraduate.  Jane and John had always impressed their younger daughter, John’s favorite, that when the time came, they would do the same for her.  Jane could not stand the thought of not keeping their promise, but the last thing she wanted was to become a financial burden to her children if and when she ran out of money to live on.

Should she scale down her life style in order to keep their promise to their daughter?  Or should she brace her daughter for impending disappointment?

***

For five years, Betty proudly assumed the role of a single mother to her only daughter, Emily and kept razor sharp focus on her goal to provide Emily with the best opportunities in life, namely, the best education.  Betty had in place a disciplined regime of savings for Emily’s college education and actively encouraged Emily’s aspirations with the promise that she would be able to pay for Emily's tuition.

Happily Betty found herself in love again.  After a year and a half of old-fashioned courtship and many carefully planned joint family outings, Adam proposed to Betty and invited her and Emily into his family, which included his own three children ranging from 11 to 15.  Betty and Adam jointly agreed to have Betty take leave from her demanding, but high-paying, job to ensure the smooth integration of their two clans.

In contrast to Betty, Adam felt it was neither realistic nor his priority to adjust his lifestyle to save in order to fund higher education for each of the four children.   He felt that the best gift a parent can give to their children is the fond memories of shared family experiences before they leave home. He spared no expense in ensuring that family experiences were fun and memorable for everyone.

Should she continue to build savings for Emily’s education?  Should she start saving for the education of her stepchildren?  Should she go back to work in order to meet the competing demands on her family’s resources?

 ***

These Women in Transition need to take stock of where they are and where they are going.  Every woman plays a number of roles in her everyday life.  Her identity is made up of the composite of those different roles.  When a woman experiences “Transition,” she takes on new ones with new and/or expanded responsibilities while shedding the responsibilities and expectations associated with the old roles that she no longer plays.  With this shift in a woman’s composite of roles, questions and discomfort inevitably follow.

Jane wondered if, with the loss of her husband, she had the financial means to continue to play the role of the magnanimous parent.   Anne wondered, without the stable financial support of her husband, what she should negotiate for during the divorce settlement in order to afford her the lifestyle that her pride and dignity dictated.  Betty was used to being the sole decision-maker for the financial future of her and her own child.  Now, as a wife and a parent to four children, she wondered if she should stay the course with her commitment to her daughter or if she should face the fiscal reality and adjusts her goals.  These women all assumed new roles and needed to understand what they would entail.

These women also needed to understand how changes in their roles would affect them in their day-to-day life.  Our daily spending habits and spending style reflect the identity we assume.  They are manifested in major expenditures, such as buying luxury cars or homes, and even in casual, everyday purchases, such as a stop at Starbucks for a morning latte.  To meet the demands of their new roles Women in Transition typically must adopt new spending habits and a spending style to accommodate the fiscal realities of the new phase of their lives.  In doing so, they often sustain a sense of loss of identity and pride.  Yet, if they continue to hold onto their old identity and spending habits, they might incur damage to their financial outlook.  These women need to understand what adjustments, if any, they needed to make to their everyday lives, and more importantly how to make those changes comfortably and without regret.

 

***

These Women in Transition need more than stock tips. For Jane, Anne, and Betty, the core of these women’s identities and values were thrown into turmoil, and their lifestyles dramatically disrupted.  What should they do?

 

A Woman in Transition needs a skilled Financial Professional to help her:

  •  Identify the role(s) she will be assuming
  •  Make a qualitative realignment of her values and priorities to match her new role(s)
  • Outline the quantitative adjustments to her spending habits and spending style that will be necessary to make the numbers work with her new life
  •  Execute the outlined plan to ensure that her Transition is a smooth one

This financial professional needs to provide more than investment advice.  He or she should be able to logistically coordinate all of the relevant and necessary services such as legal, tax and insurance to design and execute a plan that holistically addresses the complex needs of a Woman in Transition.

Jane, Anne and Betty, like all Women in Transition, are entitled to embrace their new phase in life with anticipation rather than fear and uncertainty, free to look forward to a future with a healthy dose of anticipation and sense of adventure –the right financial professional can help make that happen.

*****


Athena Chang CFP, Wealth Manager

In Family Magazine (July, 2006), Athena was honored as one of the best financial planners in the Washington D.C. metropolitan region.  She has also been invited to speak about financial planning issues to a number of professional and cultural organizations.  Her professional experience as well as her emotional empathy for Women in Transition have and will continue to benefit her clients in the financial services she provides at Mclean Asset Management Corporation in Mclean, VA.  Additional information can be found at http://www.mcleanam.com/index.php?c=16&kat=Athena+Chang Athena Chang can be reached at // ' ); document.write( addy_text29170 ); document.write( '<\/a>' ); //\n // --> // ]]> athena.chang@mcleanam.com // ' ); // ]]> This e-mail address is being protected from spambots. You need JavaScript enabled to view it // ' ); // ]]> or at 703-827-0636 Ex 104 or 703-790-9151.

 

 

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