KPLC 7 News, Lake Charles, LouisianaHow Women Can Maximize Money Smarts and Win Finance Game

By Andrew Housser

When it comes to financial planning, there's no such thing yet as equality of the sexes.

Women face different financial challenges than men do. For one thing, women on average earn nearly 35 percent less than men in similar positions. For another, even in 2007, women may be more inclined to make life choices that can have a huge impact on finances -- from taking time off to raise children to losing work hours caring for elderly parents. Those decisions have ramifications for Social Security income and retirement savings. Women who heed the following seven pieces of advice will find themselves - and their finances - in better shape for the long-term.

1. Understand finances. Today, many women are financially savvy, and a large number of women manage their household's money. It is critical for both partners in a household to understand their financial situation, to create a budget outlining all income and expenses, to know how to pay bills and plan for the future, and to agree on a set of financial priorities.
   
2. Prepare for retirement. Many financial planners believe women's No. 1 challenge is preparing for retirement. No matter what women earn, they should put aside a portion of their savings for retirement. Invest the maximum in a company 401(k) plan, and save more in an Individual Retirement Account (IRA) if possible. If there is the unfortunate possibility of a divorce, understand your state's laws when it comes to dividing retirement accounts.
   
3. Make decisions carefully. Every family must decide if a parent will stay home with children, and those decisions affect more than finances. But many families overlook the impact of leaving work on Social Security income, health insurance costs and other financial factors. Consider not only the income, but the value of benefits and the psychological impact of returning to the workforce when deciding which parent -- if either -- will leave the workforce to care for children or others.
   
4. Choose careers thoughtfully. While common wisdom is that men earn more than women, in some fields women earn the same or more, according to the book "Why Men Earn More" (by Warren Farrell). In addition, a study published this year found that young women working in big cities earn more -- sometimes significantly more -- than their male peers.
   
5. Make wise marriage-money decisions. Choosing marriage? Best wishes! But don't leave good judgment at the altar. Women should not hand over all financial decision-making to a partner, and they should know about (and share) their credit history with a prospective spouse. Married women are wise to always keep a credit card in their own names, and maintain a good history on those cards. Some happily married spouses recommend maintaining three bank accounts: a joint account and one for each partner. Pay household bills from the joint account, but keep some individual funds, too.
   
6. Honesty is the best policy. More than anything, be honest with your partner and urge the same so that you can address any money problems head on. Do not hide purchases or debt problems -- if you do, you're just digging yourself a deeper hole.
   
   
7. Never think that you can't do it. Even today, many women are not taught about money and investing. Educate yourself by reading, reviewing reputable personal finance education Web sites, and watching TV programs or speakers about investing. Be cautious, but do not be discouraged.

Women can do anything to manage their money that men can do - and in many cases do it better. All it takes is a bit of planning. Take the reins and drive your financial future.