Financial planning is important for everyone. However, women need to be particularly motivated to buckle down and get the financial education they need. Here are seven reasons why it’s critical women focus on getting their financial ducks in a row.
Women live longer
Statistically speaking, women live longer than men. Consequently, women are likely to need a larger portfolio in retirement to support more years of life. Along with longer lives, women often have correlating additional health expenses. As a result, women feel more pressure to build a larger nest egg for their later years.
Women lose time in the workforce
Despite glimmers of hope that corporate America will change and offer paternity leave and better maternity leave, it’s a harsh truth that childbearing women are at a financial disadvantage. I am a huge proponent of women staying home after giving birth for as long as they possibly can. The realities of life, however, are that not all women can afford to do so, and not all companies (especially small companies) are equipped financially and operationally to accommodate extended maternity leave.
Regardless of the job protection guaranteed for women taking maternity leave (and that protection is an important first step), losing time in the workforce generally impacts their careers. The accumulation of missed months over a period of years may also result in missing out on educational and other career advancement opportunities. I’m not saying it’s right. I’m saying it happens. This can impede a woman’s earning trajectory over the arc of her career. And lower income means lower savings in most cases.
Women are still paid less than men
I wrote about this on National Women’s Day. It’s unconscionable that women still make less than men do for the same work. The entertainment industry has focused on this inequity recently and has made high-profile, positive strides to correct this deficiency. Let’s hope that trend continues across industries. Again, lower income means lower savings.
Women are less likely to ask for the raise or promotion
Another gender-focused workforce statistic I abhor is the fact that women are less likely than men to ask for a raise or promotion. A few months ago, I read an article that asserted that when it came to a higher position, even women who were completely qualified were less likely than men who were wholly unqualified, to ask for the same job. The mere thought makes me want to rip my hair out and scream.
If women are holding themselves back in the workforce, they will clearly end the race with less money in their coffers, all things being equal.
Women today are in the “Sandwich Generation”
Increasingly, women are finding themselves in what is known as the Sandwich Generation. While they are at the pinnacle of their career, they are simultaneously dealing with launching grown children from the nest, as well as coping with aging parents who usually need more attention and support.
Given the recent rough economic environment, kids are not always going off to college and immediately landing a decent job. Having your children rebounding and coming home to live or floundering to find a job and requiring some additional financial support is also a financial setback for parents.
If those same parents are concurrently providing financial support for their OWN aging parents, you have a perfect storm. Even if there aren’t direct financial costs associated with helping aging parents, there are usually financial impacts associated with missing work in order to care for them.
Women get the short end of the stick in divorce
Even in states where equal distribution is the norm for divorce cases, women still suffer greater financial loss due to divorce. Women live longer, so with a divorce, dividing the retirement “pot” exactly in half is misleading. In addition, those same assets are more likely used by a woman to support children or aging parents.
Also, consider the earning potential of the woman versus the man. As I mentioned, a woman might earn less due to time out of the workforce for child-bearing. That results in her ability to save for retirement being hampered by the loss of a second household income in the event of a divorce.
Women fall prey to stereotypes
It is the twenty-first century, and STILL we have girls and women believing the myth that “girls are bad at math.” It’s maddening! WOMEN, WE MUST STOP THIS!!! Maybe math is not your favorite subject, but personal finance does not require adeptness at trigonometry and calculus. It only requires the ability to compute basic arithmetic. Plus, on-line calculator resources can help anyone overcome a fear of numbers quickly.
Due to this stereotyping, women self-select to surrender taking the reins when it comes to their personal finances. They assume it is too difficult, and thus they don’t even try. It is central to the mission of SimpleMoney to help women break through this stereotype and get the knowledge they need to be wildly successful with money. Managing your money can be simple. Stick with us, and you will see for yourself!
Women do have one important thing going for them
As a rule, women are far more likely than men to seek help when they are in a tough spot. Improving their finances is no exception. Whether you get help by hiring a financial planner or aim to increase your financial knowledge using a resource like SimpleMoney, don’t hesitate. Get input early and often to keep yourself on the best possible path with your finances.
Have you experienced financial hardships that are more typically imposed on women? Share your experiences below.