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The Financial Planning Challenges Women Face

Having a plan set up before a troublesome and unexpected financial event is crucial, especially for women. A majority of women want to learn more about financial planning, but a large portion aren’t confident enough to do what it takes to protect themselves. It’s time for ladies to take control of their finances and build a solid retirement plan.

Money management can be a murky area for anyone. You never know when you might lose your job, have to deal with the death of a spouse or go through a divorce. No one wants to think about something bad happening, but facing these realities before they happen can save you from months, years or even a lifetime of struggle. According to a study conducted by the Social Security Administration, around 20% of divorced women above the age of 65 live in poverty. That’s a staggering statistic considering it is 6.5% higher than the average poverty rate of all Americans. (For more, see: 10 Finance & Relationship Tips for Working Women.)

Gender Inequality and Finances

Gender inequality in the workplace and at home makes financial independence difficult. On top of earning less money overall, women also tend to spend less time in the workforce, often taking extended time off or leaving their job altogether to take care of children. This means less money earned, less time to build retirement funds, and no opportunity to take advantage of employer benefits such as savings incentive match plans.

Divorce and Money

Another huge struggle comes after a divorce. As I mentioned above, a large number of divorced women live in poverty, but that doesn’t account for an even larger number of women who scramble to stay afloat above the poverty line. After a divorce, it is common for one partner to take on full custody of the children. It is even more common for the woman to take custody of the children after separating from the husband. So in addition to dividing up physical assets such as a house, furniture, or vehicles, the separated individuals also have to work out child support. Who pays for piano lessons? Do the children have a college fund and, if not, is their future education going to suffer because of the divorce? (For related reading, see: Financial Solutions for Young Women.)

A Lack of Financial Confidence

When asked, a distressingly significant number of women cited not feeling “confident” in making financial decisions on their own. However, studies show that women are better at managing investments than men – it is just a matter of being educated, gaining confidence and vigorously pursuing opportunities.

Even if a woman has worked and saved money prior to leaving a job (to take on the responsibility of being a full-time mother or housewife), the value of money held in accounts or in cash decreases every year due to inflation. Statistically, women live about five years longer than men. That makes having a solid long-term financial plan even more important. Strong investments can help ease the burden of saving money.

Are you ready to take control of your finances? (For more, see: 4 Tips to Improve Your Financial Health in 2017.)