As has happened for over a century, countries around the globe will come together throughout the month of March to celebrate women and promote a gender-equal world. International Women's Day is a special occasion meant to not only acknowledge women's vast and significant contributions, but also to challenge ongoing inequities and plan for a future that provides women with opportunities, respect and stature equal to men.
The theme for this year's celebration is #ChooseToChallenge, with a focus on our individual responsibility to call out and challenge injustices. The organizers rightly point out that "a challenged world is an alert world," and "from challenge comes change."
For my part, I'd like to capture this spirit to focus on the needs of single women, an ever-growing but often overlooked segment of our population.
Attitudes toward marriage have changed
When we discuss single women, it's important to realize we're no longer talking about a small group. Roughly 20-30 percent of women between the ages 18 to 65 are single. Women are also far more likely to be single later in life–with about half of women ages 65 and older on their own. By some estimates, around 90 percent of all women will be solely responsible for their finances at some point in their lives.
The reasons for this are as varied as the women themselves. For divorced or widowed women, being single may simply be a matter of circumstance. But for increasing numbers of women, being single is a conscious choice that provides increased independence and self-determination.
Financial obstacles are magnified for single women
There's no question that women in general continue to lag behind men when it comes to job opportunities, equal pay and access to resources to prepare for a financially secure and productive future. But the most challenged of all—and the ones whose personal finances were most impacted by the COVID-19 recession—are those women living on their own, running households and raising children at the same time. Without another adult to share financial and daily responsibilities, the challenges unpartnered women face are magnified.
Ways to take action—now
For much of the last year, millions of American women were in survival mode—simply doing their best to stay afloat during the pandemic. Now, with some insights gained from this extraordinarily difficult year, I'd like to encourage all single women to reflect on their circumstances—and take whatever steps are necessary for a fresh start.
1. Imagine and set goals for the future you want
In keeping with the #ChooseToChallege theme, my first piece of advice is to imagine the future you want for yourself and your family. Especially if you've been through tough times, think where you want to be in five, ten or 20 years. Let go of old mental constraints that may have held you back in the past. Now's the time to think big. What are you most passionate about? Could that passion lead to a new career path or business opportunity?
Once you have a vision for where you want to go, get specific about your goals, your time frame and the resources you'll need along the way. Write it all down. If your goals require more education or financial backing, what will that take? The more specific you get, the more likely you are to turn your goals into reality.
2. Make a financial plan
I'm a big fan of financial plans for one main reason—studies have shown that they work. A comprehensive plan will incorporate all aspects of your financial life, making sure all parts are working together. I liken this to a holistic perspective on your health—you need your heart, lungs and other organs to be operating together to achieve maximum health.
Financial advice can come in a lot of forms and be delivered by a variety of professionals. Depending on your circumstances and the complexity of your situation, you may choose to work with a CERTIFIED FINANCIAL PLANNER™ professional, or you may simply create a plan on your own. Either way, it should support the vision that you created in Step 1.
3. Maximize your earnings
It's an unfortunate truth that many women underestimate their worth and accept a smaller paycheck than they deserve. We know that on average women make about 80 cents to a man's dollar. Women of color earn less. To be sure, it's difficult to close this gap. But there are some things you can do to help increase your income. Look for opportunities to advance both within your current role, as well as outside of your current job, and never stop learning. Know your worth by doing research on salary ranges for your job, and then use that information to negotiate for higher pay. Learn to be your own advocate—and advocate for other women. Network. And talk with other women—about money.
4. Prepare for the unexpected
No matter how well you plan and prepare, there are bound to be bumps in the road. You can't prevent bad things from happening, but you can help minimize the impact by having a healthy emergency fund and adequate insurance. Every independent person should ideally have access to enough cash to cover a minimum of three months' necessary expenses, preferably more. In addition to comprehensive health insurance, evaluate your need for disability and long-term care insurance.
5. Save—and invest—for retirement
When I think about preparing for retirement, I often think of what a colleague once told me: Saving for retirement is always a marathon, but for many women it’s an ultra-marathon—uphill, through the woods, in heels—while carrying two bags of groceries and pushing a stroller.
This is the race of a lifetime, so give yourself plenty of prep. In an ideal world, you'll start to save at least 10 percent of every paycheck in your twenties, and continue to save at that rate for your entire working life. Start later, and you'll likely need to set aside a much larger percentage. That may sound harsh, but the reality is that retirement is very expensive, especially if you're fortunate enough to have a long life.
The other equally important part of preparing for retirement is investing. Historically women have been averse to stock market risk. But what they're missing is that not investing for long-term goals is a much greater risk.
A challenge and an opportunity for all women
To me, International Women’s Day isn't just a time for reflection, but a time for action. All women, whether married or single, need to secure their financial futures. As we rise to this challenge, we can be part of creating a more equitable world for everyone, full of opportunities and hope for the future.
Have a personal finance question? Email us at email@example.com. Carrie cannot respond to questions directly, but your topic may be considered for a future article. For Schwab account questions and general inquiries, contact Schwab.