Women & Finances: Give Yourself Permission to be Your Priority.
Two years ago, shortly after joining Generation Capital Management (GCM), Scott and I sat down to define GCM’s purpose beyond the standard mission of a typical wealth management firm. On the top of my list: finding effective ways to engage with women about finance. I wanted to increase female participation in the industry through hiring, sponsoring, advocating, and mentoring. We have since hired two additional women. GCM is 71% female, with women leading equity research, investment, compliance, marketing, human resources, and business development efforts. We have also joined formal industry mentorship programs and became involved in several women’s groups within the Rochester area. Our next focus is the second part of this: building an effective strategy to make women more interested in their financial futures and strive towards financial independence. There are so many reasons why this is crucial, and equally as many reasons why the progress is slow.
Taking control of financial independence as a woman makes you individually stronger, more self-reliant, and empowered. Partnering with other like-minded individuals builds a strong foundation and community that will perpetuate change. This is a large piece in the puzzle of solving for gender equality for both ourselves and future generations.
Single, engaged, married, divorced, or widowed—we should all be more involved in our finances. For those in happy and healthy relationships, women statistically live longer than men. This means you need to account for expenses longer than men. Females are statistically more likely to die single, divorced, or widowed. As women we also statistically earn less, meaning we need to live longer on a tighter budget.
GET INVOLVED. PAY ATTENTION.
Negotiate and advocate for yourself. We are the biggest cheerleaders for everyone else, it’s time to focus on ourselves. Take charge of things that are important in your life that you can control. One of those is money. Being in control of our finances helps take financial implications out of the equation when making important life decisions. No one should stay in a relationship or marriage they are unhappy or unsafe in because they feel financially stuck. However, this happens daily. You DO NOT want to wait until you are in the middle of a crisis (or eighty years old) to learn how to pay your bills, set a budget, invest, or even find where your bank accounts are. Unfortunately, this is often what ends up happening.
For many women, their finances and investing are intimidating. Women are more likely to suffer from a confidence gap where they believe that their partner is more of an expert in that area. Not being able to wrap our heads fully around something makes it difficult for us to take that first step into understanding until we are forced to. Women know more than we give ourselves credit for. We tend to be our toughest critics. Some research finds women are better investors and savers than men. Finances should be thought of as a responsibility of both partners. It is stressful for one partner to be taking all the financial responsibility and it simultaneously makes the other partner feel they don’t have a voice.
According to a study by UBS, Own Your Worth, only 19% of couples make long-term financial decisions equally. 58% let their spouse take the lead. They don’t talk to their partner about financial decisions that impact THEM. Because of this, the financial services industry has historically catered to men. However, 98% of widows and divorcees in the US urge greater financial engagement. 74% discovered negative financial surprises after the death or divorce. See your financial advisor TOGETHER. Find an advisor who speaks to both of you. Take time together to understand your financial needs and goals and create a clear understanding of where you are today and a vision of where you want to be in the future.
GCM feels strongly that we--as an industry--have an obligation to help solve this problem. To break down these barriers and improve financial literacy and independence, our industry needs to do a better job making people’s finances less intimidating and content more digestible. Tik-Tok financial gurus with no real knowledge background have millions of followers. Why? Because they made it easy to understand, easy to digest, and easy to execute on. We need to find ways to do better and here at GCM we are. This month we are launching a fee-for-planning service, genPOWERMENT, which will allow those with little or no investible assets, or assets only in their retirement plans, to gain access to the same financial advisor services that a wealthy individual would have access to. We post John’s Top Tips frequently along with easily digestible educational content on our website. We are also working to bring financial literacy to rarely or never served demographics. Stay tuned!
WHAT CAN YOU DO TO MAKE YOURSELF MORE FINANCIALLY AWARE & PREPARED?
Take Control of Your Retirement— Half of people in the US do not have enough saved for retirement. Women are less likely to save for retirement, have smaller retirement balances, and are more likely to be concerned about whether they can meet their retirement goals. Saving for retirement needs to be a top priority today. As women we tend to make sure everyone else is happy and taken care of. Our personal priorities get postponed. Your retirement savings are for your future. If that isn’t motivating enough, saving adequately also alleviates future financial burdens on others that could surface if you do not save enough to support yourself in retirement. Make sure you are at least contributing as much as the company match, if you aren’t you are leaving free money on the table. If you don’t have a company retirement plan you can also open an IRA.
Invest—Women tend to be more risk averse and there is a very large investing gap between males and females. However, if you don’t invest you are also taking the risk that you won’t be able to save enough to achieve your financial goals. Markets fluctuate and you need to be able to invest through volatility. Having a solid financial plan and making sure you remain on track helps make the volatility more digestible. A commonly cited financial regret among women is not investing more and earlier.
Have a Solid Financial Plan—Team up with a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional to figure out your goals, objectives, and your risk tolerance. We will match each of your goals with an investment strategy to get you there. As advisors, we are your cheerleaders and you won’t find a better cheerleader than John Howe, CFP®. Having an advisor in your corner helps take the intimidation out of taking your first steps towards a financial future under your control. We spend time with you on your income, expenses, budget, investments, retirement savings, insurance needs (though we don’t sell insurance), taxes, estate planning, and the intersection of all of this into your goals. It gives you a roadmap and a plan of action to get to where you need to be and then where you want to be.
Financial advisors can be strong allies in breaking down barriers for women to start actively participating in their financial futures. Women are more likely than men to ask for advice when it comes to investments and savings and to value professional advice. If you want to start building a financial plan together, give us a call.
Kasey Wopperer
Director of Equity Research & Investments