One of my favorite classes in college was Business Statistics. Who doesn’t love taking a smattering of data and using it to make (more) sense of the world? There’s something really satisfying about using data to help guide decision-making when things are uncertain.

Yet, I’ve learned in a very personal way that statistics has its limitations. When my son was born he endured a number of surgeries, infections and health issues. At one point, I asked his doctor for the probability that he would survive. She looked at me, took a deep breath, and said, “While statistics are helpful, whatever happens to your son happens to him 100%.” 

Why do I lead with statistics? Because although it’s uncomfortable to think about divorce or outliving your spouse, being familiar with probabilities can help you prepare. Recent research suggests that 90% of women will be the sole financial decision-maker at some point in their lives. In other words, there’s a good chance that this becomes your 100% reality. Having to figure out your financial position suddenly or unexpectedly can add stress to an already challenging situation. 

We see this play out often. We’ve had many women walk into the office for an initial meeting, staring at her future without her partner by her side. She feels ill equipped, totally unaware of her financial position, having delegated financial decisions to her spouse for decades. She needs help, but doesn’t even know what questions to ask.  

If I could wave a magic wand, here’s what I’d want every woman to know about her finances:

• How to access cash immediately, and where documents are stored: Everyone should have 3-6 months of expenses saved in a liquid account. If something were to happen today, do you know how to access your emergency fund? Ensure you know the location of all essential documents and account logins. A secure digital vault or legacy estate planning folder can save immense stress during a transition.

• Cash flow: Know how much money comes in and goes out each month. It sounds so simple, but many people have no idea how much money comes in and goes out each month. Cash flow becomes complicated when you have multiple income streams, checking accounts and credit cards. Start simple: review pay stubs, credit card statements and bank statements monthly to get a ballpark understanding. Go deeper: Track your expenses on a spreadsheet or in a budgeting software to identify patterns and opportunities for saving.

• Balance sheet: Know what you own and what you owe. This is your net worth, also known as your personal balance sheet. Your net worth is your assets (things you own) minus your liabilities (things you owe). Update your personal balance sheet at least once a year. Here is a snapshot of what goes into your personal balance sheet:

Assets (What You Own)

Checking & Savings Accounts

Investment & Retirement Accounts

Homes & Personal Property

Investment & Retirement Accounts

Business Interests

Liabilities (What You Owe)

Mortgages

Student Loans Credit Card Debt/Personal Loans

Business Loans

Include details about life insurance policies, so that you’re ready to contact the insurer if needed. 

And importantly, know how to access the various accounts.

• Prioritize your goals: Align your money with your values. Financial goals are more than just numbers. They are about your life’s dreams, such as planning for retirement, saving for college, or buying a home. I’d recommend creating a personal mission statement to help prioritize your goals. Many people “wing it” when it comes to saving and investing. They never take the time to write out their goals, or to think through how much they must and can save to achieve them, thinking they will do that in the future. A little intentionality now can go a long way to achieving your goals. 

• Understand your investments: Do you need to have Wall Street experience to be a good investor? Absolutely not! In fact, several decades of financial research suggest that women have historically outperformed men with their investment returns, largely because women tend to follow a more disciplined “buy and hold” investment approach, whereas men are prone to more frequent trading and overconfidence.

• While you don’t need to be an expert, you should have a high-level understanding of what you own and why you own it. For our clients, we follow a well-researched, time-tested investment philosophy using low-cost, globally diversified investments. It’s a simple, unsexy strategy… but it tends to be effective. 

Once you know your financial position:

• Review frequently. A one-time review is better than nothing, but consistency compounds. Set aside time each month to track your cash flow. Twice a year, review your goals and ensure your savings align with your values. Once a year, update your balance sheet to measure your overall progress.

• Consider partnering with a fee-only, fiduciary advisor, and don’t be afraid to ask questions. A fiduciary advisor (like Greenway) is legally obligated to act in your best interests, and can partner with you to ensure your financial plan aligns with your goals and values. One of the benefits of working with a fiduciary advisor is the continuity and accountability they can provide in the event of a sudden change. Don’t let jargon intimidate you! If you don’t understand something, a good financial advisor should be able to explain it in more simplified terms. (And trust me, the tax code and account rules are designed to be complicated! Everyone should have questions.)

Women do a lot, so it’s not surprising that many abdicate financial responsibility early on. But, chances are you’ll face the day when you hold the financial reins. You don’t need to be an investment expert to succeed. Having an understanding of your financial picture today can prepare you for that future. In fact, it’s one of the best ways to ensure that when the 90% probability becomes your 100% reality, you are ready to handle it with confidence.