The past one hundred years has seen tremendous change in the evolution of women’s roles. Women have gone from being sole caretakers of home and children, to present day where they control about a third of the world’s wealth.
According to Pew Research, a record 40 percent of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family. In 1960, that share was only 11 percent!
Women have made great strides in the workforce over the last 50 years, but many lag behind men in financial literacy and financial planning. Being able to balance the family checkbook is not enough today.
Until fairly recently, family financial planning and investing were considered a man’s role. As a result, some women do not consider themselves adequate money managers or financially savvy enough to make long-term investments.
A recent analysis by the U.S. Census reflected some alarming facts:
- 42 percent of women lack financial security
- Three out of five women over the age of 65 cannot afford to cover their basic needs
- Only 19 percent of families headed by single mothers are financially secure
- Marriage eases the financial burden, but most women outlive their male partners
- Two-thirds of men over age 65 live with a partner, while less than half of women over age 65 live with a partner.
This data is even more concerning because it shows that women are at a significant disadvantage to men from a financial-planning perspective. On average, women still make less money than men in similar occupations, and they take more time off from their careers to raise children and care for aging parents than men. This results in women having lower lifetime earnings, less personal savings and lower Social Security benefits. Women also have higher health care expenses and they usually live longer than men.
According to Catalyst, the average full-time working woman will lose more than $460,000 over a 40 year period in wages due only to the wage gap. To catch up, she will need to work 12 additional years.
It is important for women to become more informed about all aspects of money and finance. Studies have shown that financial literacy can be linked to behavior. Those who are more financially literate are more likely to plan for retirement, to invest in the stock market, pay attention to fees, and to borrow at lower costs. Financial literacy is also linked to greater financial well-being.
Credit.org offers these tips to help women take control of their finances:
- Women who have a written plan are more likely to accomplish their goals. Putting financial goals in writing starts the brain working on solutions so people become emotionally committed.
- Women who have a savings plan in place save more than women who do not. Research shows that people with a savings plan in place save about twice as much as those with no plan.
- Because women tend to have lower retirement balances due to being away from the workforce to care for children and family members they need to make retirement planning a priority by putting money away sooner so that investments will have time to grow.
- Women are very likely to be solely responsible for financial decision making at some point in their lives. Women have longer life expectancy than men and most will need to know how to manage their finances especially during the years that they may find themselves living alone.
It is said that “life is a journey, not a destination.” The journey to financial literacy and freedom from money worries can make a world of difference in a woman’s life.
To help you become financial savvy, our partner Money Management International created a tool 30 Steps to Financial Literacy for Financial Literacy month. This free financial education tool can be used as a springboard to financial wellness. It can be used anytime you have a few minutes to spare and can be done at your own pace. Please take a few minutes to review this tool and let it help kick start your financial education journey.