Financial Tips for Women: What You Need to Know

December 1, 2019

Financial Tips for Women

Women have come a long way in the last few decades, especially in terms of financial independence. There is still opportunity for progress, especially if women want to improve their financial situation and ensure a secure future.

Across all age groups, women consistently demonstrate lower levels of financial savvy than their male counterparts. Combine that with a still-present pay gap between the genders -- and the fact that today’s workforce will need more to survive retirement than any generation prior -- and it’s easy to understand why financial literacy among women is more important than ever.

Luckily, there are many resources available to women today to help them improve their understanding as well as their finances. Let’s talk a bit about what the problem is, and how women can take control.

Where the Disparity Exists

We are all accustomed to hearing about wage gaps between men and women, but the disparity in finances goes so much deeper than that. Some quick facts:

  • Only 40% of women believe they are the more financially literate spouse.
  • Women 65 and older are 80% more likely to be impoverished than men
  • Of those retiring in 2019, women will need an estimated $150,000 to cover healthcare costs alone; men need only $135,000.
  • Women put away an average of 43% less for retirement than men, though they will actually need more
  • Nearly half of women don’t think their retirement savings will last until the end of their lifetime.

We could go on, but you get the idea: compared to men, women aren’t making enough, aren’t saving enough, and aren’t as confidently in control of their finances. To blame? A number of factors, including biases against women taking time off to have and raise children, women making less than men, and financial education in the workplace that is provided with greater frequency to men.

What Today’s Women Can Do About It

Understanding the financial concerns facing today’s women is one step. The next is knowing how to fix them.

Analyze Your Situation

Before you can learn how to better your financial situation, it’s important to first recognize where you stand. This means analyzing all spending; knowing how much you spend and where you spend it is paramount to better budgeting and saving.

You should also take a look at your investment portfolio, rate of contributions, and projected retirement savings. For many, this might mean hiring a professional -- such as a financial advisor -- to get into the nitty gritty.

Invest in the Future

The concept of investing can be confusing for everyone. Compared to their male counterparts, though, women tend to find themselves less comfortable with managing an investment portfolio -- which is surprising, considering female investors actually outperform men!

This hesitation has given rise to female-based investment platforms, such as Ellevest, aimed at helping women confidently build successful portfolios.

Image courtesy of Ellevest.com

Don’t want to go that route? Picking a target date fund (determined by your planned retirement year) is an easy way to save for the future while automatically mitigating risk as the years go on.

Additionally, women should always save in a workplace 401(k) if there’s an employer match, at least until they reach the maximum match offered. Failing to take full advantage of this is the same as leaving free money on the table.

Educate Yourself

A secure financial future relies on a few things: dedication, a little bit of luck, and knowing what you need to do. By educating yourself for today and tomorrow, you can ensure that you are optimizing both.

This means taking advantage of finance-based education opportunities offered in the workplace. You may also want to consult with an advisor or coach, who can give you one-on-one suggestions about your personal situation.

There are many excellent blogs and books aimed at women’s finances, too, which are a wealth of knowledge (pun intended). These include Afford Anything, Rich Women Rock, and Making Sense of Cents, to name a few. Annuity.org also has a slew of resources geared toward women and their finances.

As a woman, there are many concerning statistics of which you should be aware, especially when it comes to money. By educating yourself, taking control of your situation today, and making informed decisions for tomorrow, though, you can ensure a successful financial future.