Women Finding Financial Independence
People form a unique relationship with their finances. Having a healthy relationship with your finances is more than the dollars and cents in your account. It’s about educating yourself and understanding the goals you want to accomplish in the future. It’s also about being able to adapt and react with control when your life changes course. Women face distinctive challenges as they build future wealth.
Challenges women commonly face include earning less, living longer, investing later, burdens of caring for loved ones, and divorce.
Women make less than their male counterparts. This can affect how much a portfolio is worth in retirement, because women are saving less. Betterment states, “2018, white women make 77 cents for every dollar that men make. African American women make 61 cents on the dollar, and Hispanic women earn just 53 cents on the dollar.”
Women carry the emotional and financial burden of caring for both children and aging parents. This is known as the, “Sandwich Generation.”
A greater savings gap is caused because women also take time away from work for family. This could be raising children or caring for our parents. The time away means that we would have to save even more when we went back to work to “catch-up” to our male counterparts who didn’t take time away. The percentage we would need to save varies based on the age at the time spent out of the workforce.
Women also experience financial hardship due to divorce. Divorce brings in a different set of challenges for women as they transition. However, women, according to a 2018 Fidelity study, by 2030 will control two thirds of the nation’s wealth.
Women can overcome some of these challenges by educating themselves, understanding their current financial position as well as their future goals for themselves. By developing a relationship with a trusted professional and actively engaging in identifying their needs and potential solutions, women can take control of their finances.
Carrie Schwab-Pomerantz, said, “For women, financial independence is a matter of necessity.”