With our practice in Atlanta, Georgia, we have many women walking in the door. And even though most of our clients actually manage their money very well, we continue to see persistent issues with the women…particularly the married women. As a result, I’d like to share some information to help all of our female readers. Make no mistake…the guys aren’t perfect, and eventually, I’ll get around to creating an article for the men–our gender’s got its own money problems. But this one’s for the women, so let’s get into the top five mistakes we see on a regular basis.

Mistake #1: Ignoring Your Credit Score
One of the most common mistakes women make is not establishing a solid credit history. Remember, a good credit history will give you more–and often better–financial options. Lenders will review your credit history when deciding whether to extend you credit. If your credit history is good, you may be offered credit at more advantageous terms, potentially saving you hundreds or even thousands of dollars in interest. And here’s some extra incentive: prospective employers or landlords may check your credit history before offering you a job or renting you a home. Do not rely solely upon your boyfriend/husband to provide the positive credit profile for your relationship. It’s heartbreaking to have recent divorcees come into my office and admit that “everything” was in their husband’s name: the house, car, VISA card…everything. All this time, he’s been building a positive credit history while she built…no history at all.

Here are some ways you can help keep your credit history healthy:

• Regularly check your credit reports. You’re entitled to a free credit report once a year from each of the three major credit reporting bureaus. To request your report, call 877-322-8228 or visit www.annualcreditreport.com.
• Don’t cosign loans or sign joint credit applications without understanding the consequences. You will be legally obligated to repay the debt, and any late payments may hurt your credit rating.
• If you struggle with debt, don’t wait to take action. Call your creditors. They may be better able to work with you before you get too far behind. Ignoring the situation will make things worse.

Mistake #2: Saving for Your Children’s Education–But Not Your Own Retirement
As a parent, you feel it’s your obligation to pay for part (or all) of your child’s college education, and you may put off saving for retirement until the kid’s college bills are paid first. While it’s natural to want to put your child’s needs first, I want to make sure you are financially secure going forward. Your kids have countless options for financing college–loans, scholarships, work-study, grants– and they will have many years after graduation to pay for it. On the other hand, you can’t borrow money for retirement; there are no scholarships for the golden years. So with a limited number of years to save, make sure your retirement is a top priority; if there’s any cash leftover, then save for the kids’ college.

Mistake #3: Underestimating Your Need for Life Insurance
There’s no sugar coating this one…most women don’t have enough life insurance. In fact, most women who are stay-at-home-moms or even part-time outside the home think they don’t need any insurance, based on income. So if that’s you, then listen up. You are actually contributing a great deal to your family’s finances. How much would it cost if you had to hire service providers to do everything that you do on a daily basis? A LOT!! The services you provide for your family are invaluable and very costly for private hire. So if you were to die, how would your family members be able get by? Could they hire a professional to take care of the household? And would your passing devastate the college fund or retirement nest egg? What about ordinary day-to-day living expenses? Life insurance serves as a financial buffer to help protect your family even after you’re gone.

Mistake #4: Not Planning for a Long Retirement
The good news is that retirement is likely to last 20 to 30 years…but that’s also the bad news (if you’re not prepared). Outliving your retirement income is one of the biggest risks any retiree faces, especially women. This is because, according to the National Center of Health Statistics, a woman who reaches age 65 can expect to live until at least age 85. However, because women typically spend less time in the workforce (and may earn less for the same work than their male counterparts), women’s retirement savings and benefits are often shortchanged.

So what can you do to make sure you’ll have enough income to last throughout retirement? Here are some suggestions:

• Set a realistic retirement savings goal, save as much as you can, and keep track of your progress.
• If you’re married, plan for retirement with your spouse. It’s especially important to account for your joint life expectancies and ensure that you have a steady stream of lifetime income.
• Find out how much you can expect to receive from Social Security, and what you can do to maximize your benefits.
• If your nearing retirement, consider buying long-term care insurance to help protect your retirement savings from the high cost of long-term care. And because women are often the primary caregivers for a loved one, consider coverage for family members as well.

Mistake #5: Not Seeking Title on Joint Assets
Just like Angela Bassett’s character in “Waiting to Exhale”, many of our female clients are devastated when they are confronted with a separation (or divorce) only to learn that their names are not on title to the house, car, or other assets. State laws largely dictate the division of property obtained during marriage, and without a prenuptial agreement, assets obtained before the marriage typically fall under state jurisdiction as well. Women–if you remember nothing else–remember this: If you live in a house with your husband, make sure your name is on the title. Even if you do not make the mortgage payment, make sure your name is on the title. Even if your relationship is perfect and you’ll never split up, make sure your name is on the title…you catch my drift?

Ask your five-year old where money comes from, and the answer you’ll probably get is “From a machine!” Even though children don’t always understand where money really comes from, they realize at a young age that they can use it to buy the things they want. So as soon as your child becomes interested in money, start teaching him or her how to handle it wisely. As we stress with our five Keys to SHINE™, it is critical to give your child a solid foundation for a lifetime of informed financial decisions.

Lesson 1: Learn to Handle an Allowance
An allowance is often a child’s first brush with financial independence. With allowance money in hand, your child can begin saving and budgeting for the things he or she wants.

It’s up to you to decide how much to give your child based on your values and family budget, but a rule of thumb used by many parents is to give a child 50 cents or 1 dollar for every year of age. To come up with the right amount, you might also want to consider what your child will need to pay for out of his or her allowance, and how much of it will go into savings.

Some parents ask their child to earn an allowance by doing chores around the house, while others give their child an allowance with no strings attached. If you’re not sure which approach is better, you might want to compromise. Pay your child a small allowance, and then give him or her the chance to earn extra money by doing chores that fall outside of his or her normal household responsibilities.

If you decide to give your child an allowance, here are some things to keep in mind:

• Set some parameters. Sit down and talk to your child about the types of purchases you expect him or her to make, and how much of the allowance should go towards savings.
• tick to a regular schedule. Give your child the same amount of money on the same day each week.
• Consider giving an allowance “raise” to reward your child for handling his or her allowance well.

Lesson 2: Open a Bank Account
Taking your child to the bank to open an account is a simple way to introduce the concept of saving money. Your child will learn how savings accounts work, and will enjoy trips to the bank to make deposits.

Many banks have programs that provide activities and incentives designed to help children learn financial basics. Here are some other ways you can help your child develop good savings habits:

• Help your child understand how interest compounds by showing him or her how much “free money” has been earned on deposits.
• Offer to match whatever your child saves towards a long-term goal.
• Let your child take a few dollars out of the account occasionally. Young children who see money going into the account but never coming out may quickly lose interest in saving.

Lesson 3: Set and Save for Financial Goals
When your children get money from relatives, you want them to save it for college, but they’d rather spend it now. Let’s face it: children don’t always see the value of putting money away for the future. So how can you get your child excited about setting and saving for financial goals? Here are a few ideas:

• Let your child set his or her own goals (within reason). This will give your child some incentive to save.
• Encourage your child to divide his or her money up. For instance, your child might want to save some of it towards a long-term goal, share some of it with a charity, and spend some of it right away.
• Write down each goal, and the amount that must be saved each day, week, or month to reach it. This will help your child learn the difference between short-term and long-term goals.
• Tape a picture of an item your child wants to a goal chart, bank, or jar. This helps a young child make the connection between setting a goal and saving for it.

Finally, don’t expect a young child to set long-term goals. Young children may lose interest in goals that take longer than a week or two to reach. And if your child fails to reach a goal, chalk it up to experience. Over time, your child will learn to become a more disciplined saver.

Lesson 4: Become a Smart Consumer
Commercials. Peer pressure. The mall. Children are constantly tempted to spend money but aren’t born with the ability to spend it wisely. Your child needs guidance from you to make good buying decisions. Here are a few things you can do to help your child become a smart consumer:

• Set aside one day a month to take your child shopping. This will encourage your child to save up for something he or she really wants rather than buying something on impulse.
• Just say no. You can teach your child to think carefully about purchases by explaining that you will not buy him or her something every time you go shopping. Instead, suggest that your child try items out in the store, then put them on a birthday or holiday wish list.
• Show your child how to compare items based on price and quality. For instance, when you go grocery shopping, teach him or her to find the prices on the items or on the shelves, and explain why you’re choosing to buy one brand rather than another.
• Let your child make mistakes. If the toy your child insists on buying breaks, or turns out to be less fun than it looked on the commercials, eventually your child will learn to make good choices even when you’re not there to give advice.

A higher salary. More job security. Doing what you love. A chance to give back. Changing careers can be rewarding for many reasons, but career transitions don’t always go smoothly. Your career shift may take longer than expected, or you may find yourself temporarily out of work if you need to go back to school or can’t immediately find a job. Fortunately, planning for the financial impact can make the transition much easier.

Do Your Homework
You’ll want to make sure that you clearly understand the steps involved as well as the financial consequences of a career move. How long will it take to transition from one career to the next? How will changing careers affect your income and expenses, both in the short term and the long term? Will you need additional education or training? If so, how will you cover the expense? How will your career move affect your health, life, and disability insurance coverages?

You should prepare a realistic budget and a timeline for achieving your career goals. And if you haven’t already done so, save up an emergency cash reserve that you can rely on, if necessary, during your career transition. It’s also a good time to reduce outstanding debt by paying off credit cards and loans.

And here’s another suggestion. Assuming it’s possible to do so, keep working in your current occupation while you’re taking steps to prepare for your new career. Having a stable source of income and benefits will make the planning process much less stressful.

Hands Off Your Retirement Savings
Planning ahead can also help protect your retirement savings. When confronted with new expenses or a temporary need for cash, people tend to look at their retirement savings as an easy source of funds. But raiding your retirement savings, whether for the sake of convenience, to raise capital for a business you’re starting, or to satisfy a short-term cash crunch, may severely limit your plans for the future. Although you may think you’ll be able to make up the difference in your retirement account later–especially if your new career offers a much higher salary–that may be easier said than done. In addition, you may owe income taxes and penalties for accessing your account funds early.

Get Help From Others Who Have Been There
When contemplating a career move, there’s really no substitute for getting help from people who understand the hurdles you’ll face when changing professions. Talk to a specialist. Depending on your goals, this may be a mentor, career counselor, small business representative, or an individual who holds a job in your desired profession. A qualified financial professional can also give you insight into the potential impact of a career move and help you take steps to protect your finances.

Your credit reports contain information about past and present credit transactions. They are used primarily by potential lenders to evaluate your creditworthiness. So if you’re about to apply for credit, especially for big items like a mortgage or car loan, you should review all three of your credit reports; they each possibly contain different accounts and personal information.

See What They See…For Free
You are entitled to a free credit report under the following circumstances:

• A company has taken adverse action against you, such as denying you credit, insurance, or employment (you must request a copy within 60 days of the adverse action)
• You’re unemployed and plan to look for a job within the next 60 days
• You’re on public government assistance
• Your report is inaccurate because of fraud, including identity theft

The Annual Freebie
In addition to the above scenarios, you are entitled to one free credit report every 12 months from each of the three credit bureaus.

You can obtain your free annual reports online at www.annualcreditreport.com, by calling 877-322-8228, or by completing an Annual Report Request Form and mailing it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Alternatively, you can contact each of the three credit bureaus:

• Experian National Consumer Assistance Center, www.experian.com, P.O. Box 2104, Allen, TX 75013-2104, (888) 397-3742
• Trans Union LLC, Consumer Disclosure Center, www.transunion.com, 1000, Chester, PA 19022, (800) 916-8800
• Equifax, Inc., www.equifax.com, P.O. Box 740241, Atlanta, GA 30374, (800) 685-1111

If you make your request online, you should get access to your report immediately. If you request your report by phone or mail, you should receive it within 15 days.

Make the Freebies Work
Keep in mind that you do not have to get all three annual free reports at the same time. For example, we generally recommend that our clients order one of their free reports every 4 months:

• January - Experian
• May - Equifax
• September - Transunion

This little trick ensures our clients maintain free ongoing credit reporting throughout the entire year.

What’s It All About?
Your credit report usually starts off with your personal information: name, address, Social Security number, telephone number, employer, past address and past employer, and (if applicable) your spouse’s name. Check this information for accuracy; if any of it is wrong, correct it with the credit bureau that issued the report.

The bulk of the information in your credit report is account information. For each creditor, you’ll find the lender’s name, account number, and type of account; the opening date, high balance, present balance, loan terms, and your payment history; and the current status of the account. You’ll also see status indicators that provide information about your payment performance over the past 12 to 24 months. They’ll show whether the account is or has been past due, and if past due, they’ll show how far (e.g., 30 days, 60 days). They’ll also indicate charge-offs or repossessions. Because credit bureaus collect information from courthouse and registry records, you may find notations of bankruptcies, tax liens, judgments, or even criminal proceedings in your file.

At the end of your credit report, you’ll find notations on who has requested your information in the past 24 months. When you apply for credit, the lender requests your credit report–that will show up as an inquiry. Other inquiries indicate that your name has been included in a creditor’s “pre-screen” program. If so, you’ll probably get a credit card offer in the mail.

You may be surprised at how many accounts show up on your report. If you find inactive accounts (e.g., a retailer you no longer do business with), you should consider closing the account and asking for a letter from the creditor confirming that the account was closed at the customer’s request.

Basing the Future on the Past
What all this information means in terms of your creditworthiness depends on the lender’s criteria. Generally speaking, a lender trusts you to make timely monthly payments against your debts in the future if you have always done so in the past. A history of late payments or bad debts will hurt you. Based on your track record, a new lender is likely to turn you down for credit or extend it to you at a higher interest rate if your credit report indicates that you are a poor risk.

Too many inquiries on your credit report in a short time can also make lenders suspicious. Loan officers may assume that you’re being turned down repeatedly for credit or that you’re up to something–going on a shopping spree, financing a bad habit, or borrowing to pay off other debts. Either way, the lenders may not want to take a chance on you.

Your credit report may also indicate that you have good credit, but not enough of it. For instance, if you’re applying for a car loan, the lender may be reviewing your credit report to determine if you’re capable of handling monthly payments over a period of years. The lender sees that you’ve always paid your charge cards on time, but your total balances due and monthly payments have been small. Because the lender can’t predict from this information whether you’ll be able to handle a regular car payment, your loan is approved only on the condition that you supply an acceptable cosigner.

Correcting Errors on Your Credit Report
Under federal and some state laws, you have a right to dispute incorrect or misleading information on your credit report. Typically, you’ll receive with your report either a form to complete or a telephone number to call about the information that you wish to dispute. Once the credit bureau receives your request, it generally has 30 days to complete a reinvestigation by checking any item you dispute with the party that submitted it. One of four things should then happen:

• The credit bureau investigates, the party submitting the information agrees it’s incorrect, and the information is corrected
• The credit bureau investigates, the party submitting the information maintains it’s correct, and your credit report goes unchanged
• The credit bureau doesn’t investigate, and so the disputed information must be removed from your report
• The credit bureau investigates, but the party submitting the information doesn’t respond, and so the disputed information must be removed from your report

You should be provided with a report on the reinvestigation within five days of its conclusion. If the reinvestigation resulted in a change to your credit report, you should also get an updated copy.

You have the right to add to your credit report a statement of 100 wor
ds or less that explains your side of the story with respect to any disputed but unchanged information. A summary of your statement will go out with every copy of your credit report in the future, and you can have the statement sent to anyone who has gotten your credit report in the past six months. Unfortunately, though, this may not help you much–creditors often ignore or dismiss these statements.