There are three major financial planning issues that face women during their lives. Everything from cultural expectations to practical considerations makes the financial planning of men and women different. Ignoring the differences puts women at a disadvantage when concerning their financial livelihoods.
Women Live Longer and Earn Less
Men are still statically better paid compared to women and on average they still earn roughly 20% more for the same job. This instantly puts women at a disadvantage when planning for retirement. Additionally, roughly 80% of men die married whilst 80% of women die single/widowed. This means they have to plan with less money for a longer period of time and maintain financial burdens by themselves later on in life.
Women Intend for their Money to Benefit their Family
In many cultures around the world, women are encouraged to share their income with their family. This may mean spending it on children or looking after ageing parents etc. In reality there is nothing wrong with this but when women feel responsible for family finances they may have more of a tendency to disregard their own financial future.
The social pressures may cause them to think that they need to fund their adult child’s university education or bankroll their parent’s retirement. The guys in the sky seem to have got it right. Always apply your own oxygen mask first before assisting others. This statement can ring true within the efforts of planning your financial future. Nobody can help their family if they are struggling themselves.
Women are more Likely to Feel Intimidated when Investing
A variety of behavioural studies around the world have suggested that women generally have less confidence when investing their money compared to men. A Prudential Financial study that focused on the phenomenon known as ‘the confidence gap’ is what has been linked to hindering a woman’s investment portfolio.
According to NASDAQ.com, “Women’s lack of confidence can lead to inertia when making investment decisions, aggravating women’s tendency to underinvest in risky assets”. Although this will be different for each and every women, the trends that were studied revealed results along these lines. Everyone works hard for their money so naturally there is some scepticism over risky investments, therefore if you don’t have the confidence to do it by yourself, partner with a trusted financial advisor. The role of a financial advisor can even select your investments for your so you never have to step too far outside of your comfort zone. However, whenever you plan on spending your money, always check e.g. that advisor’s credentials, other working relationships etc.
Ultimately, nobody other than yourself can look after your financial future, so do as much as you can for yourself before risking it to help others. Plan for the future and make it a priority. If you have any knowledge or experiences you would like to share about your difficulties as a woman, please use the comments section below, we would love to hear from you.