Women have unique financial needs. Especially, those who are involved in agriculture. On average, we live longer but earn less. It is common for us to have gaps in employment that impact future retirement benefits. Therefore our finances are impacted more severely, than most men, by events like divorce and widowhood. Yet, we lack the financial skills and experience needed to help us navigate these issues.
Approximately 30% of U.S. farm operators are women and that percentage is growing. Female principal producers totaled 288,264 in 2012 and grew to 798,500 in 2017 – a 177% increase.
It is estimated that 85 – 90% of women will be on their own financially at some point in their lives. Basically, this statistic reflects women who don’t marry, experience divorce, or they outlive their husbands.
Therefore, good financial planning is a risk management strategy that all women should know!
How to Achieve Financial Success
Ten important things women need to know to achieve financial success, reduce financial stress, live more comfortably, and to feel financially secure:
- Financial goals
- Know your personal goals, family goals, and business goals
- Pay yourself first
- Look into 401(k)s, 403(b)’s, and Section 457 employer tax-deferred retirement plans
- Develop and maintain your human capital
- Learn new skills, continue your education, and maintain computer literacy
- Establish and maintain a good credit rating (in your own name)
- Check your credit regularly
- Pay bills on time
- Avoid charging over 50% of available credit.
- Check your credit regularly
- Deal with debt
- Seek low interest loans and credit cards
- Pay more than the minimum payment
- If you need help, consider credit counseling
- Explore various tax strategies
- Look into off-farm tax deferred savings plans, IRAs, and tax-exempt securities
- Know and grow your net worth
- Calculate your net worth annually to measure financial progress
- Document cash flow and spending patterns
- Track your monthly income and expenses, compare the numbers, and develop a spending plan
- Have insurance
- Cover risks with the largest potential losses, not the most frequency of happening (liability, disability)
- Avoid non-essential insurance such as limited health policies
- Stay educated and informed
- Attend seminars, read publications, seek financial advisors, and enroll in classes
Annie’s Project
One great way to stay educated and informed regarding financial and risk management is Annie’s Project. Annie’s Project is an educational program dedicated to strengthening women’s roles in the modern farm and ranch enterprises. Farming is a complex business and more farm women are becoming active business partners in their operations. Participants will gain a better understanding of financial literacy. Additionally, participants will learn about all five areas of risk, to become better decision-making partners in the family operation.
Programs are localized and conducted in small groups. Also, participants are encouraged to contribute their life experiences to facilitate learning from each other. Local specialists provide the skilled guidance needed for women to build skills and a local network. To date, Colorado has served over 400 women who have graduated from the program. To register for upcoming classes and learn more about Annie’s Project in Colorado visit https://abm.extension.colostate.edu/annies-project/.
