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Women: Be the financial decision maker you were born to be

Women are taking on more and more – personally and financially. And with that, comes much responsibility.

A lot of work goes into running a household. It’s the culmination of many different skills: good organization, thoughtful time management, and careful financial management.

The numbers prove it

A recent Gallup poll shows that women (37 percent) and men (34 percent) are relatively equal when it comes to taking the lead on paying the bills.1

However, women spend more time than men purchasing consumer goods and services for their families. In fact, women use their buying power and influence to drive 70 to 80 percent of consumer purchasing.2

That being the case, a woman should be just as involved as a man in the rest of the household’s finances, which includes saving and investing money. There’s good news on that front. Men and women perceive they’re about equal when it comes to making the financial decisions. Fifty-three percent of women and 48 percent of men report they are the decision-makers.1

That’s a good thing. But keep in mind that women usually live longer than men. The average American woman will live to age 81 while the average American man will live to 76. So the chances are good that if a woman isn’t already responsible for financial decisions, she probably will be someday.

Another survey shows that 73 percent of women are highly engaged in their long-term finances and 57 percent of working women are knowledgeable about their personal finances, savings and investments.4 If you’re the other 27 percent or 43 percent, respectively, listen up. There are reasons why you should — and can be — engaged and knowledgeable about money matters.

You’re a boss, lady

More and more women are breaking down barriers in the workforce. Women in the U.S. occupy 50.04 percent of the jobs.5 Forty percent are the breadwinners  in their households.4 Though many are holding higher paying jobs than in years past, they still overall make 80.4 percent of what men earn.6 This doesn’t add up, especially if women are expected to live longer than men. So, ladies, it’s all the more reason to get a tight hold of your finances.

You’re already caring for others and making big decisions

After a baby is born, it’s likely that both a mother and father will take time off from work. However, it’s common for mom to take 10 times as much temporary leave as dad. And when she does return to work, she might opt for a job with more flexibility but not pay as well. This can lead to long-term financial consequences that affect her salary, retirement and Social Security.7

In the midst of raising families and growing careers, men and women don’t worry too much about becoming a full-time caregiver to an adult family member, ranking it on a scale of 4 out of 10 as the likelihood of happening. But when it does happen, women are most likely to take on the role of caretaker.8

More than 75 percent of caregivers are women.9 Many caregivers spend an average of 24 hours a week tending to their loved one. Some decide to quit their job because of the time commitment. A woman 50 years old or older who leaves the workforce loses an estimated $324,000 in wages and retirement savings.10

And women who’ve experienced common workforce interruptions — such as raising children and caring for older family members — are likely to have earned less money by the time they reach retirement. One estimate reports a loss of $1,055,000.7

Take the bull by the horns – financially speaking

Now’s the time to immerse yourself in learning all about your finances. If you’re in a relationship with someone who takes care of all the money, challenge yourself to do a few things differently.

Open your own savings or retirement account that is separate from your spouse

Many women worry about how much money they’ll have in retirement. Only 18 percent of women believe they’ll have enough money to get them through their retirement years. That’s not surprising since women live longer than men.11

The longer you live, the opportunity increases for you to need more money for health-related expenses. For example, a man and a woman, both 65 years old, will require a different amount. To have a 90 percent chance of covering medical premiums and median prescription drug expenses, a man needs $144,000 and a woman needs $163,000 over the course of their retirements.12

Attend all meetings with your financial professional

Families raising children lead busy lives. It’s a challenge to manage all the daily activities and responsibilities. Traditionally mothers are more often looked to for help. Women are eight times more likely than their male partners to manage kids’ schedules and tend to sick children.7 Make sure the meetings are scheduled at a time when you don’t have other commitments. And if something comes up last minute, change the time of the meeting so you don’t miss out.

Be responsible for at least a few of your combined accounts

As the years pass, more accounts may be added to your financial portfolio. Be sure you’re familiar with where they’re located and their worth. Also, your name should be included on all your accounts and investments, in case your partner becomes ill or dies, to ensure your legal right to the assets.13

Work with your spouse to understand what he/she is responsible for and have them teach you (and vice versa)

Perhaps you pay the monthly bills but your partner takes care of the expenses that typically come up once a year, such as car insurance. Make sure you know the amount that’s due and when.

Know where records (and passwords) are kept

There’s nothing more frustrating than not knowing a password to access an important account. Keep your lists current and safe and make sure you — and your partner — update it on a regular basis.

Be sure to know the location of such financial records as bank names and account numbers; insurance information with policy numbers, agents’ names, and contact information; and sources of income and assets.14

Women are already closely involved with their family’s day-to-day finances. The natural next step for them is to take a long-range view of their family’s — and individual — financial health. It’ll lead to a greater sense of financial security.

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1. Brenan, Megan, “Women Still Handle Main Household Tasks in U.S.” Gallup News, January 29, 2020.

2. Nelson, Amy, “Women Drive Majority of Consumer Purchasing and It’s Time to Meet Their Needs,” Inc., July 17, 2019.

3. Heid, Markham, “Why Do Women Live Longer Than Men?” Time, February 27, 2019.

4. Survey, “New Survey Shows Women Widely Engaged in Personal Long-term Finances, Yet Confidence Lags,” American Council of Life Insurers, October 21, 2019.

5. Kelly, Jack, “Women Now Hold More Jobs Than Men in the U.S. Workforce,” Forbes, January 13, 2020.

6.” TED: The Economics Daily,” U.S. Bureau of Labor Statistics, April, 2020. First quarter, 2020.

7. Germano, Maggie, “Women Are Working More Than Ever, But They Still Take on Most Household Responsibilities,” Forbes, March 27, 2019.

8. “LIMRA Secure Retirement Institute: Women Rate Financial Risks Higher than Men,” LIMRA, February 8, 2018.

9. “Caregiver Statistics: Demographics,” Family Caregiver Alliance, April 17, 2019.

10. “The female face of family caregiving,” National Partnership for Wome and Families, November 2018.

11. EBRI/Greenwald Retirement Confidence Survey. RCS FACT SHEET #5 Gender and Marital Status Comparisons Among Workers, 2019.

12. EBRI Issue Brief - Savings Medicare Beneficiaries Need for Health Expenses in 2019, May 16, 2019.

13. “5 Money Mistakes Women Should Avoid,” WISER Women, 2018.

14. “Getting Your Affairs in Order,” National Institute on Aging, June 1, 2018.

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