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Financial Planning for Women & Considerations for Your Future

Financial Planning For Women: Feel Confident About Achieving Your Financial Goals

Financial planning for women is more important today than ever before. There have always been societal obstacles for women trying to build wealth and control money matters, but these days women are a true fiscal force. Statistically, women hold the majority of household spending power and makeup slightly more than half the world’s population. They also control more than $10 trillion in U.S. household financial assets and, by 2030, that figure is expected to triple.

If you’re wondering how to take the reins of your financial future through smart financial planning for women, these four actions can help you feel confident and more in control.

Financial Planning for Women 101

Though the above statistics certainly bode well, there is still much work to do for women who want to build wealth and achieve their goals, especially in the wake of the pandemic. COVID-19 disproportionately affected women, knocking many of them out of the workforce. Even before the pandemic, women faced a persistent gender pay gap and a tough financial landscape—only 12% reported feeling “very confident” they’d be able to retire comfortably.

So, how can you gain confidence? Here’s where to start:

1.  Consider Your Career Progress

Today, women account for 47.7% of the global workforce and hold 50.04% of all jobs in the United States, a number that experts predict will continue to rise. And yet, women also face a disproportionate number of responsibilities that can disrupt their career progress. Things like childcare, caring for aging parents, or being on point for other family assistance can all put a woman’s career on pause. That trend was exacerbated by the COVID-19 pandemic. Statistics show that women ages 24-44 have been three times more likely than men to be out of work during the pandemic because of childcare demands.

The best thing you can do to combat these challenges is to stay true to your financial goals and priorities. Take the time you need to review your finances with your financial advisor so you can make the necessary adjustments and take the correct precautions.

2. Combat the Gender Pay Gap

The gender pay gap is a reality for women around the working world. Though progress has been made societally and financially, according to the United States Census Bureau women who work full-time still earn an average of 81.6 cents to every dollar that full-time working men earn. It may seem at first like an issue of a few dollars and cents, but the long-term implications are significant: the wage difference can cost American women between $700,000 and $2 million over a working lifetime.

There’s not much an individual can do to combat this kind of systemic injustice, but there are steps you can take to make sure you’re doing all you can to counteract it.

  • Push for a higher salary. This may seem obvious, but reports show that 60% of women have never negotiated with an employer over pay. Don’t be afraid to advocate for yourself and ask for what you need.
  • Save more. It may seem counterintuitive—earn less, save more—but by setting aside a greater percentage of your income than the average man, you can be on more equal footing when it comes to savings and investment potential.
  • Start strategizing early. Ask yourself about your financial goals as early in your career as possible. Working with a financial advisor can help you develop a personalized investment strategy so you can reap the benefits over the long-term.

Remember, it’s never too late to start using these tactics to better position yourself for the future.

3. Invest Intentionally

Women hold a lot of power with their purse strings these days. In fact, women’s wealth is increasing around the world, and it’s predicted to continue trending in that direction. Though women have historically been left out of the investment conversation, there has never been a better time to think about how to make your money work for you.

Assess your financial goals and consider how investing can help you reach them more confidently. Some important factors to think through include:

  • Your risk tolerance. How much volatility are you comfortable with? Would you be able to withstand short-term fluctuations for potential long-term gains, or would you rather make tried-and-true investments instead?
  • Your overall goals. Are you focused on retirement? Travel? The next generation’s education? All of the above? Only you can answer these questions, and the answers will go a long way toward helping to shape your investment strategy.
  • Your timeline. How much time do you need to achieve your goals? Perhaps there are different timelines for different phases of your financial plan?

All of these considerations are meaningful when it comes to financial planning for women.

4. Live for the Long-term

Did you know that, according to the Centers for Disease Control and Prevention, women live an average of five years longer than men? The good news: that can give you a longer runway to plan and strategize your finances. However, it also means your money will need to last longer.

Financial planning for women can feel daunting but creating a framework that works for you is within your reach. Consider balancing growth-oriented investments like stocks, with more stable sources of income. Some post-retirement options include Social Security, pensions, annuities in payout, and any certificates of deposit through a bank, which earn a fixed interest rate. Of course, when in doubt, contact your financial advisor so they can help you develop a flexible strategy to secure your future.

Financial Planning for Women: Final Thoughts

Women are up against more challenges when it comes to financial planning, but they also have immense opportunities to build wealth and wisdom throughout their lives. Take the next step forward today so you can live confidently for many tomorrows to come.

If you’d like to speak with an advisor on the Arbor Capital team, please reach out to us today. We look forward to hearing from you!

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