To help women successfully take control of their finances, she encourages investing with confidence, rather than stashing cash in a low-yield savings account.
While zero-risk cash investments are entirely appropriate for short-term needs, such as an emergency fund, savers will lose money in the long run by trailing the rate of inflation.
“We put and keep far too much cash in the bank and we should be investing in the markets,” Chatzky said.
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The first step is to make savings a priority — aim to put aside 15 percent of whatever you earn, she advised — and put those dollars to work in an index fund. You don’t have to actively trade stocks, Chatzky said; just pay attention to your fund’s approach toward shifting from stocks to bonds.
Alternatively, opt for a target-date fund, which gradually moves from riskier investments to more conservative options as you near retirement.
Then, remember to revisit your portfolio periodically and rebalance as necessary to ensure that your asset allocation is still in line with your short- and long-term goals.
If you want help, meet with a professional. “I am a big fan of financial advisors,” Chatzky said.
Financial advisors can play an important role, as well, in addressing any specific financial concerns you may have, such as a job change, move, illness, change in marital status, buying or selling a home, or paying for a child’s education.
“Your advisor may tell you to increase your savings rate, restructure the way you’re paying down your debts, [or] help you strategize to avoid taxes,” she added. “All of those provide a quantifiable return.”
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
Source : CNBC
