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5 Things Every Woman Should Do to Help Improve Her Finances

5 Things Every Woman Should Do to Help Improve Her Finances

June 21, 2018

As a female Financial Advisor working in an industry traditionally dominated by men I find myself in the unique position to empower women to pursue their financial goals.

Many of the women I have worked with have made great progress, but industry studies point to a startling fact:  when compared to men, women fall short when it comes to investing and saving for retirement.

Instead of concentrating on the differences between men and women and the reasons why women are falling short, I prefer to focus on some core concepts that all women should consider in order to improve their finances.  

  1. Invest in yourself - On average, women live longer than men and those extra years should be financially independent. In order to safeguard that independence, it is important to prioritize your own savings. Many women are very nurturing and instinctively try to help other people, many times at the expense of their own financial future.

    It is easy to put off saving for retirement and prioritize other expenses when you are busy building a career and/or taking care of a family. Retirement saving needs to be a priority - taking care of yourself is just as important as taking care of others. It is not selfish to want to be confident in your retirement.

  2. Create a plan - While it may sound optimistic, an attitude of “it will all work out” is not realistic when it comes to finances. It is not a good idea for anyone to assume that their financial future is secure, or depend on someone else to plan for them. It would be beneficial for every woman, married, single, or somewhere in-between to have a financial plan in place and understand how their financial decisions may affect that plan.   

  3. Get educated - Over the years I have met many smart, capable women with amazing careers who shy away from investing because they do not believe they fully understand the process or the risks.  This is where a good Financial Advisor can really make a big difference.

    Some Advisors assume that female clients do not want to know the details about their investments and the reasoning behind trading or allocation decisions. I believe that educating all clients about their investments and helping them understand any recommended changes is a big part of an Advisor’s job.

    My advice is to work with someone who clearly answers any questions you have and helps you understand how your money is being managed. The money is yours. You should understand what your money is invested in, what kinds of risks you are taking, and how your account balance fits into your larger financial picture. Ultimately, your Advisor should make you feel confident in their financial recommendations. If, at the end of an advisory meeting, you do not have clarity, find another Advisor.  
  4. Be more aggressive - When compared to men, women tend to be overly cautious when it comes to investing though they live longer and may need to be more aggressive to help their savings grow. My advice: don’t be afraid to be more aggressive! Recognize that you may instinctively want to play it safe, and then allow yourself to consider taking on a little more risk. With the recommendations and support of a good Advisor, who can help you understand the risk/reward trade off, you should have the confidence to step a little out of your comfort zone.

  5. Meet with a professional- Women have been traditionally less likely to seek out professional financial advice, but I have observed a gradual change over the last few years. More women are independently seeking the assistance of a Financial Advisor and recommending that other women do the same. It is important to talk to other women about finances, the more women talk to each other about being involved in handling their own finances, the more comfortable women will be in making important financial decisions.

As investors, women face unique obstacles both in terms of earning money and investing that money for the future. Despite this challenge, women also have equal access to investing and investment advice. Accumulating adequate resources for longer lives requires substantial savings coupled with reasonably aggressive investing - both of which women are more than able to do.

The views depicted in this material are for information purposes only and are not necessarily those of Cetera Advisor Networks LLC. They should not be considered specific advice or recommendations for any individual. All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful.