Financial planning saves a lot of stress and anxiety about money. Both men and women, single or married, should be involved in planning for their future. But women face a different set of challenges.
This article is not intended to express how difficult it is to be a woman. Women have enormous opportunities and have already come a long way in the world of work.
That said, your financial planning needs can be altered in many ways by factors that may be beyond your control.
The 5 reasons why women should plan differently are outlined below. They may not be applicable in all cases, but women are more likely to experience these factors than men. With a clear, well-thought-out and evolving financial plan, women can achieve financial confidence, independence, and peace of mind.
Longer longevity
Women are estimated to live 5 to 6 years longer than men. This increased longevity means that your retirement savings should last longer. During those additional years, they may incur more expenses. Health problems may arise or the need for specialized care may arise. All of this equates to an increase in expenses during your last years of life.
Unplanned longevity can put pressure on retirement savings. Women should not plan to receive or inherit money from their spouse. With the dwindling availability of defined benefit pensions, people remaining single, or marriages ending in divorce, a monthly spousal pension check may not be an option. Women need to plan for their personal longevity because of this.
Interruption in employment
It is not uncommon for a woman to take a break from employment when children are born and raised. Some women decide to quit their corporate job and become a homemaker. Or … they switch from their higher paying job to one that offers more flexibility and better hours. This puts them in a position where they are earning less personal income. This has a significant impact on your ability to save for retirement.
Also, getting back to the job market right where you left off can be difficult. After years of absence, technology, younger workers, more experienced workers, and changes in the industry can make this more difficult to achieve. Women who take a break from work to start a family may face these obstacles when trying to re-enter the workforce.
Life as a woman costs more
It’s no wonder that women generally spend more in certain areas than men. All beauty and cosmetic industries are primarily focused on women. Generally, women spend more on makeup, hair, and skin care products. They also generally spend more on clothes, shoes, and accessories. The above expenses tend to occur much more frequently and recurrently. Men don’t spend as much on these.
Additional financial planning and budgeting can help control any overspending in this category. In most cases, even tightening the belt on some of these items may not solve the problem. Life as a woman … costs even more.
Women are more likely to experience independence
Whether it’s because you have outlived your spouse, are single, widowed, or divorced, women are more likely to be the only ones making financial decisions at some point in their life. This is another reason why it is important to have a financial plan that is prepared for the future. In previous generations, women were used to taking a backseat to finances. This is not the case. Today, a proactive approach to future financial needs is always advisable.
Women can earn less than men
This is a long-standing concern. Statistically, women earn less than men. Women may take a job break that can hinder their salary growth, or are less likely to request a raise, causing them to be treated differently compared to their male counterparts.
This can have a significant effect on your future financial situation. The good news is that both men and women have an equal opportunity to prepare for retirement. The sooner you can start investing and planning for retirement, the better prepared you will be. The longer you allow your money to grow and accumulate, the more stable your financial future will be.
In summary:
All of these reasons should be taken into account when determining your financial plan. Women tend to be challenged by these 5 concerns more often than men. Regardless of salary or marital status, the sooner and more focused women are on taking control of their finances … the better off they will be.
If you have a mother, sister, daughter, or friend who is struggling to find financial independence, don’t hesitate to give us a call. We specialize in helping women find clarity and solutions to reduce financial stress and simplify life. You can reach us at 716-662-4470.
