A woman’s path to saving and investing can be very different from a man’s.
Women’s History Month is a celebration of how far we have come. And while it’s true that women have never had more freedom and economic power than they do today, I am a female CFP® and financial advisor with a front-row seat to the financial lives of women, and I can tell you that women still contend with challenges and realities that just aren’t on the radar for the vast majority of men.
No matter if the work is as simple as budgeting or as complex as a full financial plan, there are societal pressures that fall predominantly on women, as well as structural imbalances that completely change the working woman’s timeline to save.
The first is a gender pay gap that can’t be ignored. While it is slowly closing, it was reported that women earned 84 cents to every dollar a man earns. This alone limits resources and the amount women are able to save.
Lack of financial literacy, to no fault of their own, also poses a problem and typically plays a large part in why women start saving later than men. It is only recently that financial professionals have started to break out of the mindset that only men can be breadwinners. It isn’t always easy to find an advisor who knows how to talk to us, instead of just talking over us.
You don’t know what you don’t know, and this knowledge gap can cost a woman thousands, if not hundreds of thousands of dollars over a lifetime, when considering the power of compound interest.
That knowledge gap costs even more when you consider that women have to stretch their wealth over a longer time period. The National Center For Health Statistics shows women in the U.S. outlive men by about five years. When combined with a gender pay gap, a shorter time horizon to invest and the fact that many women take breaks to parent or care for a loved one, it is no wonder most women come into a financial planning office intimidated and overwhelmed.
But those women still need to plan for their futures. What are they to do?
Start small. Budget, budget, budget and stick to it. Pay yourself first. Put money into your retirement plan at work and take full advantage of any matching contributions from your employer.
If you don’t have an emergency fund, start one. Things happen. For example, ConsumerAffairs found only 41% of Americans can afford a $1,000 car repair bill out of pocket, and I’m willing to bet that statistic drops even lower for women. Plan for the unexpected, whether it’s for yourself, your family or your home.
A plan will protect you, but it also gives you a path to reach big-picture goals that will add joy to your life. You should feel empowered to walk into an advisor’s office and ask for help to reach your goals. You wouldn’t think twice about visiting the doctor if your body didn’t feel right. Think about your financial health the same way.
If you are married, ask to play a role in your family’s finances if you are not already. Take the time to understand your savings, retirement accounts, credit cards and loans. And if you haven’t already, get your will and other estate planning documents in order, especially if you are a parent to a younger child.
No matter your age, the best thing you can do to take control of your finances is simply get started. One of the best feelings I have at CapWealth is when a female client understands someone is finally listening to what she needs and will help her without judgment.
Ask for help. Don’t beat yourself up if you “should” have started earlier. Trust me, today is better than never.
Hillary Stalker, CFP, is an executive vice president and financial adviser at CapWealth. For more information, visit capwealthgroup.com.
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