Your Excuse: "I Don't Know Where to Start"
Why You Feel That Way
Here, in a nutshell, is how women make nearly every large, important decision: We do our homework, using the resources at our fingertips—the Internet, newspapers and magazines. We tend to be consensus builders, so we gather the opinions of the people we trust most: our mothers, sisters and girlfriends. We take our time readying a case we could defend in the toughest of courts and then—and only then—we pull the trigger. Most of the time, that sort of decision-making works just fine.
Unfortunately, in the world of money—particularly in the world of investing—there are few right answers. Which stock is the best one to buy? Which mutual fund will rise the fastest? People may claim to know, but no one really does. That makes it tough to get to the starting line, particularly for women.
And there are other complicating factors: The world of money has its own complicated vocabulary. The world of money is shrouded in secrecy. And the world of money involves higher stakes than picking a movie to see on date night. And there are no right answers. Of course you're stuck.
How to Get Over It
You have to get yourself to acknowledge—no, more than that—to really believe that in this particular area of your life, you do not have to be 100 percent right in order to get started. Yes, you heard me: You don't have to be right. And not only that: You don't have to be perfect. You don't have to be the best. You don't have to be at the top of some class. You don't have to be the smartest. Instead, you have to be good enough. And you have to believe that good enough is just fine.
How does that work in practice? Take this example you've no doubt faced a number of times in the past decade: refinancing your mortgage. Say you're sitting with a $200,000, 30-year fixed-rate home loan at 6 3/4 percent. Rates have fallen to 6 percent. Refinancing now would save you $98 a month. But some experts have been quoted saying they see rates falling to 5 percent. Do you refi, or do you wait? If you're expecting the best possible result, you're stuck. But if you believe in the power of good enough, you forge ahead. And then—guess what? Starting tomorrow, you pay nearly $100 less a month, and over the life of your loan you save $35,315 in interest alone. If rates do fall to 5 percent, you can always refinance again.
What else can you do quickly, cheaply and easily?
Next: "I like money—it's numbers I can't stand"
- Sign up for an automatic savings plan at your bank or brokerage firm and sock away $100 a month. Invest it at 8 percent, and in 30 years it'll be worth $150,129.
- Call a local lawyer and get that will you've been delaying. And while you're at it, get a living will, healthcare proxy and power of attorney. It'll cost $500 to $1,000—or significantly less if you use software like Willmaker to write your own. Not much when you consider you're protecting the people you love!
- Get your credit report for free at annualcreditreport.com. Knowing what's happening in your report is the best way to protect yourself from identity theft.