In this issue:
All of those college degrees women are earning these days and the evolution of family structure has contributed to a mom phenomenon: about two-thirds of families rely at least in part on a mother’s income, according to a 2014 U.S. Congress Joint Economic Committee report. What’s more is that women are the breadwinner or on par with their significant other’s pay in 49% of households, a recent study by Ketchum and BlogHer shows.
Women – moms in particular – have become a major economic force, changing the modern workforce. Today, 71% of mothers with children at home are working, the Bureau of Labor Statistics reports; in 1962, the level was half that.
For starters, the increase of women in the workforce has fueled U.S. economic growth. The economy is 13.5% bigger than it would have been if women hadn’t increased the time they spent working for pay since the 1970s, translating to an additional $2 trillion in gross domestic product, according to government estimates. GDP, the value of all the goods and services produced in a country, could be 5% higher if female employment rates matched those of males in the U.S., according to a 2012 study by Booz & Co. Women make up about 47% of the workforce in the United States.
Working mothers also have a positive influence on their children, according to a study released in May by Harvard Business School. The survey showed that daughters of working moms earned 23% more than those of stay-at-home mothers, and sons were more likely to help with housework and spend time caring for children and family as adults.
Finally, many of these breadwinner women are leading their family’s financial futures. In a 2014 study, 27% of married women said they take charge of financial and retirement planning, up from 14% in 2006. The same study pointed out that 53% of the women who turn to a financial advisor for guidance consider themselves on track or ahead of schedule on their financial goals.
Chances are you or someone you know is among these working women who help strengthen the economy, inspire a generation of children and take charge of their family’s financial well-being. It’s a tough job, but the rewards are many.
Sources: U.S. Census Bureau, U.S. Bureau of Labor Statistics, Pew Research Center, Accenture’s Defining Success study, Prudential Financial Experience & Behaviors Among Women study, Harvard Business Review
Caregiving impacts people – physically, financially and emotionally – affecting careers, lifestyles and states of mind. According to one study, the number of adult children providing personal care and/or financial assistance to a parent has more than tripled over the past 15 years to nearly 10 million people. While no two experiences are the same, here are some common things to expect and how to prepare should you or someone you know suddenly be thrust into the role.
In an ideal world, we don’t anticipate a loved one needing care. But, in the real world, chances are that most of us will become a caregiver on some level, maybe to a spouse or aging parents.
In thinking about the progression of types of care, first consider if paid care is in the cards or if unpaid in-home care is your only choice. Most people want to stay in their own homes as long as they can, but family members may be hesitant to leave someone who needs care alone. For some, a combination approach (e.g., unpaid care from friends and family and paid in-home services) may be a good idea and could allow your loved one to remain where he or she feels most comfortable.
For those unable to single-handedly undertake these tasks, residential centers such as assisted living (more independence and less-involved medical needs), nursing homes (full-service medical care and supervision) and specific or continuing care facilities can help.
Discussing what your loved one is comfortable with, while being realistic, is the best way to start the conversation. Once you’ve agreed on the care they need, the costs must be broached. Your financial advisor can help you add it all up and help you determine what works best in your situation.
When caring for someone still living in or returning to their home, the costs of homemaker or home health aide services depend on the level of support needed. For homemaker services, think household tasks that can’t be managed alone and “hands-off” care such as cooking, cleaning and running errands. Home health aides provide more extensive care, including “hands-on” personal care, but not medical care. The national median hourly rate is about $20, and the cost of homemaker services increased more than 4% from 2013 to 2014.
There is much to consider, but remember, you don’t have to plan alone for the costs associated with the care that’s right for your loved one. Your family and your parents’ professional advisors can help you figure out what they can afford in order to help you determine what you’re willing – and able – to contribute.
Perhaps most important is the emotional impact caregiving can have on both parties. Your loved one may have to face the fact that they’re incapable of doing certain things on their own, which may manifest itself in anger, frustration or shame. Aging faculties, too, can result in erratic behavior. On the other hand, your loved one may be grateful that you are by their side.
You’ll experience some powerful emotions as well. Someone you’ve loved and admired is becoming more and more dependent, and the strong parent or spouse you remember may not be as evident. You may feel guilty and feel that perhaps you’re not the best spouse, co-worker, parent or caregiver. The truth is you can’t do it all; you’ll need to set boundaries for yourself and your family, and – this is important – get as much help as you can.
Although caregiving can seem like a burden, it often is undertaken freely and with great love. For caregivers themselves, the payback is a chance to develop a stronger relationship with a parent who tenderly cared for them or a spouse with whom they’ve built a life. If it gets overwhelming, and it will, remind yourself of the reasons you’re there: love, gratitude and a desire to help. Those things alone can make the effort more than worthwhile.
Sources: Family Caregiver Alliance, caregiver.org; U.S. Department of Health & Human Services; MetLife Study of Caregiving Costs to Working Caregivers, 2011; Institutional Retirement Income Council, “The Problem with Living Too Long,” 2013; National Alliance for Caregiving in collaboration with AARP; “Caregiving in the United States,” November 2009; Per year/
Genworth Financial, Genworth 2013 Cost of Care Survey and Genworth 2014 Cost of Care Survey.
Starting your own business takes a leap of faith; not only in yourself, but in the product or service you plan to sell. Unlike many leaps of faith, however, this one can be planned for. Which is especially important because, according to the author of “How to Succeed in Business by Really Trying,” 60% of new businesses fail within the first three years. Here are some steps to take to start your business on the right foot:
1. Identify your opportunity
The best laid business plan goes above and beyond what’s necessary. Before you open your (perhaps virtual) doors for the first time, make sure to gain experience, conduct research and learn your market inside and out. Although the finished product is important, a business plan’s real value comes from the systematic research that goes into it.
2. Understand your customer
Who will you sell your product or service to? Figuring this out early can help as you begin to grow and shape your business.
3. Create a business name
Don’t fret if you can’t find the perfect name just yet – that will come to you over time. For now, pick a working name to use. When you’re ready, register the finalized name with the appropriate government departments.
4. Find startup money
Look for government-backed loans, venture capital and research grants to get you started. Avoid burdensome commitments, like long-term leases, until you’re sure what the cash-flow and expenses of your business will be.
5. Structure your company’s ownership
Are you better at flying solo or working with a partner? Whichever you choose, find the team setup that makes the most sense for you and your business – whether it’s a sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, nonprofit or cooperative. Make sure you’re ready to stick with your choice, as this can largely impact your business’s future.
6. Decide where you fit in
Whether your business is brick and mortar, web-based or an in-home service, it’s important to come into the market understanding how your company can compete and establish a niche. Knowing this can help you establish the right location to build your business.
7. Get your Employer Identification Number (EIN)
This is the federal tax number that will be used to identify your business. It’s free, takes minutes to do and will allow you to keep your Social Security number private, protecting you from identity theft. This is the number you’ll use to identify your business as you get your business license, permits and insurance.
8. Cover your bases
Obtain a state tax identification number, workers’ compensation, unemployment and disability insurances. If necessary, get a certificate of resale.
9. Hire employees
Choose people who you not only want to work with, but who will work hard for your company.
10. Finalize your plan
Organize your finances, enlist the help of a solid bookkeeper and open a business bank account using your business name and EIN. Don’t forget to keep your financial advisor in the loop, too. Personal and professional finances go hand in hand.
Material prepared by Raymond James for use by its advisors.
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