Unique Financial Challenges Women Face

Women balance many responsibilities both inside and outside the home―whether it’s working full time, caring for their families, running a business, or volunteering in their community―women today are busy. Money management is one of their many duties, but sometimes women don’t feel equipped to make financial decisions, and finances may fall to the bottom of their priority list.

What Factors Can Affect Women’s Financial Picture?

Fifty-one percent (or $22 TRILLION) of American personal wealth is now controlled by women, but there are still factors that can affect a woman’s ability to build her nest egg and work toward financial security.

Wage gaps.

The gender pay gap between men and women has improved over the years, yet it still persists. In 2022, U.S. women typically earned 82 cents for every dollar men earned, only two cents higher than the wage gap measured in 2002. Wage gaps can impact women’s lifestyle options, overall savings, and Social Security retirement benefits.

Longer life expectancies.

Women have an average life expectancy of 81 years, while men average 76 years. A longer life expectancy means women will likely need to stretch their retirement dollars further, especially if they outlive their husbands.

Time away from the workforce.

Women often take time off from work to raise children or care for aging parents. Time spent out of the workforce results in fewer years of earnings and less income to invest. Women also tend to invest less aggressively to minimize risk and prioritize stability, which can result in lower returns.

What are Some Financial Recommendations for Women?

We believe that women have a crucial voice to share when it comes to their finances and investments. Here are some practical steps women can take to feel more confident about these topics.

Develop financial literacy.

Women who want to increase their investment IQ should make it a point to ask questions and learn more. Even if you do not have a strong interest in finance, learn enough to evaluate and understand your own financial situation. Knowledge is powerful, and there are abundant educational materials available, such as podcasts, videos, and financial publications. A trusted financial advisor can also provide resources or facilitate discussions to help you increase your financial literacy. You can find Blue Trust’s resources specifically for women here: www.bluetrust.com/library/women

Start investing and saving as soon as possible.

If you haven’t started saving or investing yet, don’t be discouraged or embarrassed. It’s never too late to start. Using the power of compounding, the earlier a person begins to invest, the more time assets have to grow—increasing the likelihood of meeting longer-term goals. But starting now is better than starting tomorrow or a year from now. Find a like-minded financial advisor you trust to help you get started.

Prioritize goals―like retirement.

It’s common for women to put others’ needs ahead of their own, such as choosing to pay for their children’s college education instead of saving for retirement. This prioritization may seem like the right thing to do, but a woman is actually better off saving for her own retirement needs first. Her children may have access to educational assistance, such as scholarships and student loans, while she may only have limited time in the workforce to save for retirement.

Participate in the planning process. 

Research shows that 40% of financial advisors (consciously or unconsciously) push women out of financial discussions. Blue Trust advisors are intentional about including both spouses in financial planning conversations and investment decisions. We believe it’s critical for couples to approach financial decisions as a team and embrace having open and honest conversations about money.

Plan for the unexpected.

Everyone should prepare for unexpected situations and have estate planning documents like a will, trust, durable power of attorney, and health-care directive. Having established relationships with trusted professionals, such as an estate attorney, a CPA, and a financial advisor will ease difficult transitions.

 

We have found that the perspective women bring to their family’s financial planning is invaluable and critical to the success of their financial goals. Blue Trust advisors consider it a privilege to work with women in all stages of life. To learn more about Blue Trust’s financial services for women, please visit bluetrust.com/financial-planning-for-women/.

 

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