Women and Money

shutterstock_236186653Women’s role in today’s family dynamics and finances is shifting greatly. By estimates, in the next five years private wealth is expected to grow to $22 trillion . . . and women will control as much as two-thirds (1). Like men, women want financial security and financial independence. But once those objectives are met, women want to derive greater meaning and value for themselves, for their families and for society at large. They want to apply their values with their financial resources. Most women with financial means have great interest in supporting charities and ministries. However, women battle multiple financial barriers that impede their financial achievement, progress and success.

 

Women may lack confidence

Women on the whole still throw their hands up when it comes to making long-term financial decisions about saving and investing. For example, only 41 percent of women said they understand stocks and bonds well compared to 56 percent of men (1). Women don’t feel prepared to make wise decisions and are not sure what to consider when evaluating their options. Many times women flee from financial planning and becoming more informed. Many women think that since they don’t know the language, they can’t ask questions — or they worry that their questions sound dumb.

Those fears may be reinforced by frustrating encounters with the financial-services industry. For every helpful and plainspoken adviser or planner, there’s another who can be intimidating or condescending. Women many times say their adviser talked about things they didn’t understand or spent the entire appointment speaking to their husband.

 

Understanding

The thing that will give you more confidence in money matters is knowledge. For starters, review your financial statements on a monthly basis so you know where you stand. Then consider picking up a personal-finance book or visiting a money-information website to educate yourself in financial planning. Women tend to be insecure about the subject of money; they may focus on scrimping instead of investing, rely too heavily on others for financial know-how and may have trouble translating abstract figures into concrete goals.

Societal factors may be responsible for this lack of success, but the facts don’t seem to support this. Women outnumber men in the attainment of college and graduate degrees by 20 percent. They represent 43 percent of Americans with assets of greater than 1.5 million, they own 40 percent of US businesses and are responsible for 83 percent of consumer purchases. They have 89 percent of US bank accounts, and possess 51 percent of all personal wealth (2).  However, women have a lack of familiarity with financial products and industry jargon. Is this a man’s world; has the culture created discriminating access for women?

The truth is there are so many resources out there to help you get educated. Your employer’s resources are a good place to start. Many companies and nonprofits offer workplace education and planning tools; some even underwrite lunch-and-learn sessions or bring in outside financial advisers to give talks. Tap into your social media accounts, too, for money-management articles and insights. I was pleased to see in a nationwide study that women are beginning to see social media as a financial research tool; 12 percent said they use the sites for that purpose. When asked which social media sites they’d trust most to learn about financial issues or products or to evaluate financial companies, Facebook won the most votes from boomer women (31%), followed by LinkedIn, YouTube and Twitter. Dive into the electronic arena to get wisdom on investing. Online tools are a great way to learn and to save time dealing with your financial life (3).

 

Difficult to get started

Studies show that one of their biggest barriers to reaching their long-term financial goals was not having enough disposable income to put toward them; 31 percent called this their top financial planning hurdle. (4) It can be easier though. You can set up an automatic program between your checking account and certain investments with as little as $50 a month. Many of these plans will waive or lower their minimum initial investment if you sign up for this kind of ongoing plan.

Circumstances for single mothers and divorcees can create especially great hardships. For divorcees I typically see a huge reduction in standard of living after divorce. Ninety percent of women will be solely responsible for their finances at some point in their lives, so whether you’re single or married, widowed or divorced, financial success for women starts with education followed by action. (3) When women were asked what financial advice they would pass on to their daughters or granddaughters, the top answer given:  “don’t depend on others for your financial security.” (1)

As women take more responsibility for their finances, here the top three areas they want to learn about: 85 percent of women wanted to know how to attain their desired lifestyle in retirement; having guaranteed income for life and learning how to invest or plan for retirement on a modest income(1). The good news is that 62 percent of women express a strong interest in learning more, but 53 percent want financial information to be easier to understand.(4)

 

Financial Services Industry is not woman friendly

Only one in five women surveyed believed the financial services industry truly understands their needs. Little wonder, then, that just 31 percent of women surveyed use a financial professional, down markedly from 48 percent in 2008. The numbers, I’m glad to say, were better for boomer women: 45 percent of them said they use a financial professional. (4)

Some women surveyed don’t work with advisors because they feel they don’t have sufficient assets or the advisers’ fees are too high. There’s a big misconception that you have to have certain amount of assets or income, or have to pay a huge price to hire a financial adviser. This is not true, and in reality you can’t afford not to have a financial adviser – someone to help direct your path.

The core problem of financial barriers arises from the fact that men and women communicate very differently. Their expectations from communication also are very different. Men hear communication through a problem-solving filter. When something is expressed to them, men want to “fix” it. Women are also excellent problem solvers, but they may not always simply be looking for solutions. Women use communication to explore and organize thoughts or ideas. Sometimes, they just want to be heard and understood.

There are many barriers and roadblocks to women’s financial success, but gratefully there are many resources to overcoming and rising above the biases. Stop making excuses for not working with a financial adviser. You go to your Doctor for physical health; it makes just as much sense to get a professional checkup of your wealth. This is your future, and you have worked hard to get the most from your retirement savings. Call for an investment and retirement check up.

1)Allianz. Money and Power Study 2013

2)Huffington Post. Gender Equality Aug 25, 2014

3)Nationwide. Women and Health Care Costs 2012 study

4)Transamerica Facts About Women’s Retirement Outlook, March 2014

 

Jeffery Masters, President of Jeffery W. Masters  & Associates 954-977-5150 Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners, a registered investment advisor. Independent Financial Partners and Jeffery W. Masters & Associates are separate entities’ from LPL Financial – [email protected]

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