When given the opportunity to share insights with a Women | Wealth | Wellness focus for Financial Planning Month, my mind was left racing with possibilities. There are so many unique situations women face, and each has opportunities and challenges that must be met. Where does one start?
Let’s look at some facts:
- Women tend to live longer than men. The latest CDC data shows that women live to an average age of 81 years, while men live to age 76.
- The wage gap affects women. In 2020, women earned 84% of what men earned. With the recent challenges caused by the pandemic and recession, this disparity is projected to widen to 76% as women take time off to care for children and aging parents, or feel greater pressure to “do it all.”
- Women are less likely to be invested in the stock market. A survey by S&P Global found that only 26% of US women are invested in the market, creating an investor gap between genders.
At the same time, worldwide wealth for women continues to grow, with Covid-adjusted estimates at $81 trillion by 2023. North American women hold 37% of the wealth, an approximately $30 trillion total. This amassed wealth, whether earned or inherited, creates an opportunity – in fact a great need – to educate investors.
Next, I polled a group of friends and colleagues to determine what is important to women as it relates to their financial future. What do women value? The answers were numerous, but the two most often communicated were financial security and the ability to sustain their lifestyle in retirement. When asked what concerns them most about their financial futures, there was worry about having enough money saved to pay for retirement, funding their children’s college educations, managing finances if divorced or in the event their spouse pre-deceased them, and supporting causes they believed in.
Clearly, women need the opportunity to learn more about finances and take an active role in planning for her family’s short-term and long-term financial goals. Financial planning isn’t a one-size-fits-all approach and changes over time as needs change. What financial planning includes is understanding your current financial situation, defining your long-term goals and then creating a strategy to achieve those goals including a planned approach to review your situation and your plan at regular intervals.
Sounds simple, right? In reality, this can be complex depending on the intricacies of one’s situation. This is where I advocate for a professional advisor – and perhaps a team of advisors who can help to navigate the planning process.
Let’s look at several steps you will want to go through as part of your financial planning journey:
- Analyze your current spending patterns; there’s no judgment here, just facts. Remember, each woman’s situation is different and knowing what you spend, and for what purpose, is knowledge. This will enable you to prepare a budget.
- Educate yourself and know your personal financial situation. This is also where I’d encourage you to take ownership of your finances and don’t delegate entirely. If you depend on another person to manage your finances, it is important to be involved. Whether you rely on a spouse, a CPA, a financial advisor or a bookkeeper, regular reviews are a must. Keep your financial records organized so you can review information, as needed.
- List these items: emergency fund, savings accounts, retirement accounts (IRA, 401(k), SEP), investment accounts, property, mineral interests, children’s college savings accounts, health savings accounts, life insurance policies, and then any accounts payable, notes, mortgages, or margin accounts. You might even run a credit report and see if anything shows up. This forms the basis of your financial statement and will help you see your financial picture.
- With a baseline budget in hand and the work you’ve done to understand your financial picture, you can now consider your goals and work on a revised spending plan to help you work toward your goals. This is where you can call upon a team to help you define what short-term and long-term success looks like and what actions will best support achievement of your goals.
At AmeriTrust, we offer a wealth of resources for investors at all stages of their financial journey, including women just like you. In addition to personal service, we have frequent articles on topics such as retirement strategies, how to take proactive steps in your financial journey, and the benefits of working with a fiduciary. Our goal is to walk alongside you, listening to those things that give you worry, valuing what is important to you and helping you set course for your goals. Across our footprint, we have a dynamic team who will partner with you on your financial journey, one who understands your needs and will navigate some of the gaps women face. Please do not hesitate to reach out and let me know topics on which you would like more information.
Jodi Penn Rives, is business development officer with Argent Financial Group, the parent company of AmeriTrust. Argent is a leading, independent, fiduciary wealth management with offices across 12 Southern states.