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Packaging Horizons FINANCIAL FITNESS A Primer For Handling Financial Scare Tactics Sound advice and a positive attitude are the best beginnings to a secure financial future. By Christopher L. Hayes, Ph.D. We have all seen them. Glaring headlines that read: Experts Say $1 Million Needed To Live A Comfortable Retirement. Many women I counsel who read such headlines become panicked--particularly those who are single, divorced, widowed, or who are just starting to invest. Instead of helping to promote better saving and investing habits, such scare tactics encourage a feeling of helplessness. My main message for women against such feelings is "relax"--the average working woman today will not need to save this astronomical sum of money to live an enjoyable retirement. From my years of working with women, I know that "scaring" is no way to encourage action. From now on, whenever you read something about your financial situation that scares you and discourages you, I want you to do the following: Don't let the numbers speak for themselves. When you see headlines that warn of a bleak future if you don't have $300,000 saved to date, recognize that there is always something you can do that will help. Each of us have different lifestyles, goals, and saving/ spending habits. It is unrealistic to assume that everyone will need to save the exact same amount of money for retirement. My research indicates that the average American woman will not need as much savings as some experts claim. Of course, the more money you save, the better, but don't let such published numbers discourage you from setting your own reasonable goal. There is much positive news that never reaches print. Although I am not minimizing the serious implications of women's saving and investment predicaments, most of these doom-and-gloom headlines fail to acknowledge the positive. My research clearly shows that women are aware of the need to plan for the future and want to take steps to change their financial situation. Respond to reality, not fantasy. Don't worry about what can't be done. Focus on what can be done now. Certainly, some of you may be at a stage of life when it would have been helpful to start saving earlier, but move on, and don't dwell on what might have been. Although we know the future won't take care of itself, we can control the present. Simply starting is good enough. It is human nature to compare ourselves to others or to worry about whether we are living up to other people's expectations. If you can only put away $50 or $100 a month for your future, that's a good start. Although someone or some newspaper or magazine article may tell you that you have to save "X" dollars, don't be discouraged. Just keep saving. If you remember the story of the turtle and the hare, you'll recall that "slow and steady" wins the race. Take advantage of all the help you can get. It is absolutely vital that women take advantage of any employer-sponsored retirement plans. Try to contribute the maximum to your 401(K) plan if available. If you are fortunate to have tuition assistance benefits, again take advantage and go back to school part-time. Millions of women want to work as long as possible, and extra job skills from additional education will provide needed income for the future. The impossible can become the possible. Over the years I have seen wonderful, inspiring cases of women with modest savings who became financially secure through planning and having a positive attitude about investing. It's easy to become disillusioned by financial news, but so long as you keep working at it, you shouldn't let the doomsayers get you down. Lastly, it is important to recognize that women (more so then men) are sharp consumers. Upon retiring, the ability to "down-size" your expenses should not be overly difficult. In addition, the blaring headlines don't take into consideration that many baby boomers will be starting small businesses in their later years that will produce income for retirement. So relax--don't let the financial headlines ruin your day. Christopher L. Hayes, Ph.D. is the executive director of the National Center for Women and Retirement Research at Southampton College and the author of the upcoming book "Money Makeovers: How Women Can Achieve Their Financial Destiny" (Doubleday, 1998). He can be reached at (516) 283-4827. RETURN TO PACKAGING HORIZONS EDITORIAL HIGHLIGHTS PAGE