Dear Carrie, It seems like women still fall behind men when it comes to money. What can we do to catch up?
Here’s the truth, plain and simple. Women still earn only 80 cents to a man’s dollar. We don’t save and invest as much as men. We often spend more time caring for others and less time in the workforce. And on top of all this, we often live longer than men, so we need even more savings. But we can overcome some of these challenges. Here are five steps women can take toward financial empowerment. Make retirement a top priority. Women often put the needs of others ahead of our own. But when it comes to retirement savings, you have to put yourself first. Make sure you contribute to your 401(k) or other retirement plan, at least up to the company match, and much more, if possible. If you start saving in your 20s, you will need to put aside 10% to 15% of your income for retirement. But if you wait until you’re 40, you will still have to save a whopping 30% of your salary. Don’t just save, invest. Make the most of your money, and that means investing. Studies show that women are more cautious than men when it comes to the stock market. Overall, we invest 40% less money than men, even though we tend to be really good at investing. Long term, that puts us at a real disadvantage. Team up with an advisor. When it comes to investing and managing your money, working with an advisor can be a great boost, even if you’re just starting out. Think of a financial advisor like a personal trainer…someone who can guide you and keep you going on the right path to reach your goals. Develop a financial plan. I’m a huge fan of having a plan, because it goes beyond our savings and investing, and looks at all parts of our financial life, including insurance, taxes, estate planning, and how everything works together to help you achieve your goals. In fact, more than 60% of those with a written financial plan feel financially stable, compared to only about a third of people without a plan. Be your own advocate. Whether you’re single or married, you need to be actively involved in your financial life. You are in charge. Finally, talk to other women and share your financial experiences to help expand the conversation. Together, we can buck the stereotypes and become the CEOs of our own financial lives. Get more tips in my Ask Carrie column.
