Women and Money: Taking Control

Wednesday Mar 1st, 2023

Women who share the money management duties with their partners tend to take on most of the household finances. However, only 18% of women are very confident that they will be able to retire fully and lead comfortable lives.1,2 

This disparity does not appear to be caused by a lack of education or independence. Nowadays, women are more likely than men to attend college and earn a degree. So what prevents them from controlling their long-term financial situation?3 Lack of confidence could be one of the causes. According to one study, only 55% of women are confident in their capacity to manage their money. But, because they don't want to come across as ignorant or naive, women may avoid talking about money and hold back on their questions.4 Considering that women may live longer than men and may incur higher healthcare costs, they need to plan ahead and plan well for retirement. So, here is what to do.

Clarify Your Goals
Sit down and sketch out your plans for retirement. If you're married, you’ll want to talk to your spouse about decisions like whether you want to live as independently as possible or move into a retirement community. Do you want to travel during your retirement years, or do you plan to stay closer to your grandkids at home? 

Without defining your goals, you can't determine if you're making progress. A financial advisor can help you strategize how to get to where you want to go or adjust your strategy to fit your situation if you discover that you are falling short of where you want to be. By having a clear and complete understanding of your finances, you can create a financial plan to achieve your goals. 

If you have a long-term goal like retirement, a well-diversified portfolio with room for growth can be a great tool to pursue your financial goals. However, if you don’t have your goals clearly defined, it can be difficult to navigate market swings, and emotions can run high when the nearly inevitable market fluctuations occur. 

Get Creative
There are numerous ways to structure your finances to help you pursue your financial goals. For instance, you might want to increase your retirement account contributions while working if you anticipate taking a break from the workforce, or you may be able to make contributions to an IRA if you stay at home while your spouse works. Your individual situation is unique and may require some creativity to reach what you want out of life and your retirement.

Have Regular Conversations about Finances
Making sure you have regular financial conversations with knowledgeable sources is among the best things you can do. There are more tools than ever available to you, and working with a reputable financial expert can help make sure you always know where things stand. 

If you’ve let your long-term financial plan depend on luck, it’s now time to take the reins and regain control. Consider discussing your retirement objectives with a financial expert – and don't be afraid to ask for clarification if there is a topic you don’t understand. Take "compound interest,” for example. This is a notion that doesn’t necessarily come naturally but understanding it and concepts like it is essential in order to make wise financial decisions.

As a woman, taking charge of your finances can help you feel more confident about your future and inspire others around you. So start taking the proper steps today so that you can contribute towards a world where gender financial equality is the norm.

1HerMoney.com, April 12, 2022
2TransAmericaCenter.org, 2021
3Brookings.edu, October 8, 2021
4CNBC.com, June 8, 2022

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