Women earn less and have a weaker retirement plan compared to men, even though they’re likely to outlive men, (the average age of widowhood for women is 55). They’re often hardest hit by recessions – there was an increase in the percentage of widowed and divorced women seeking debt relief in the last recession compared to male counterparts.
Women are great at handling money in crisis situations, but when it comes to long term planning and every day management, we’re falling behind men. We’re often so busy making other things a priority that we forget to take care of our financial health.
1. Up to 75% of caregivers tend to be women
Whether they’re taking care of children or elderly parents, women are most likely to be caregivers. They are likely to spend a good portion of their working years outside of the workforce. Guess what this means?Women never really reach their full earning potential because their careers are generally interrupted so many times.
2. Most women are likely not to have a solid retirement plan
As a result, 87% of women in poverty are elderly women.Retirement is nowhere on the horizon for most of Gen X and all of Gen Y women, but unless we start planning for it seriously, we will find ourselves unable to retire… or with peace of mind. Starting and planning retirement early (even a few dollars a month) is the secret to happy retirement.
3. Women are too embarrassed to talk about money
Most women are more comfortable talking about their relationships than they are about their finances. We’ve been taught that talking about money isn’t lady-like, that it’s taboo. Because we’re so embarrassed to talk about our finances, we miss out on great opportunities to take advantage of advice, suggestions or perhaps ideas on investments.
4. Women are less likely to invest their money
Speaking of investments, the thought of making investment decisions, tends to intimate many women and so they just give up. Women are not likely to be big risk takers, they want peace of mind instead. But leaving the investment decisions to husbands and partners means we’re taking ourselves our of the driver’s seat… in fact, we’re even out of the passenger’s seat altogether.
5. Women are more likely than men to be single
Why is this a problem? It’s not because every woman just has to be married. But not having a partner affects household income. Living in a two-income home is far more financially freeing than living in a one-income home. Life emergencies like losing a job are a lot less stressful when you know you have a partner you can depend on.
6. It’s more difficult for women to get loans
Women are severely disadvantaged when it comes to money and this stretches to getting loan approvals. For instance, women are 8% less likely to get mortgages and 21% less likely to refinance their mortgages compared to men. That’s a significant difference!
Smart women are smart about their money
1. They understand and take control of your finances
Sometimes our finances are like the green monster lurking in our closets. But unlike those monsters, you don’t outgrow these ones. Only once you face your financial realities can you take positive steps towards financial freedom.
2. They have budgets
3. They think and plan long-term (with or without a partner)
We already know that planning for retirement is important, but planning 10 years down the road (if that’s not retirement) is just as important. As women, we have to be able to reach our financial goals with or without partners. Whether it’s owning property, investing or being smart with savings, having a long-term plan and reachable goals along the way are important steps to financial freedom and control.
How smart are you with your money?