Women: Engage with Your Finances

By VWG Wealth Management on March 3, 2021

Women have more money and influence than ever before.  We currently control over 51% of all personal wealth¹ and will inherit $29 trillion in intergenerational wealth over the next 40 years².  However, despite our great progress and achievement, we still face numerous obstacles, particularly when it comes to wealth creation.

According to S&P Global, only 26% of U.S. women participate in the stock market.  Women hold 71% of their assets in cash and they hold two-thirds of outstanding higher education debt.  Per a U.S. Bank survey, women are inclined to associate stress and anxiety with financial planning, and don’t enjoy spending time with their finances.  As a result of these statistics and attitudes, women are less likely to engage with their money and miss out on what Albert Einstein referred to as the “8^th wonder of the world,” compounding.  This has the potential to further exacerbate the wealth gap, and to limit financial flexibility in retirement.

Familiarity, education, and sound information can help reduce these barriers, but women need to take the first step and engage with their money.  Where should one start?

Take Inventory – there is no time like the present to understand your current financial picture.  Take advantage of more time at home to do an audit of your financial life. Understand your personal balance sheet and ask your partner questions about your combined savings, budgets, and liabilities. Make an assessment and decide what you need to learn.

Start Talking – because of historic taboos and social norms, women are less likely to talk about money with each other and often miss out on information from one of their most valuable resources – friends, family, and networks.  Pick a few friends you think would be open to candid, judgement free money talk.  Initial questions (examples – Have they refinanced their mortgage? Are they using 529 plans to save for a child’s higher education?)  might lead to a variety of tips, investment ideas or connections.

Find a Financial Mentor – broaden your inner circle of friends, family, and close colleagues to include some with specific areas of financial expertise who would be willing to give you some time and advice.  Beyond your financial advisor, you can also consider a financial role model, educator, or accountability partner.

Go digital – many have found that technology improves their awareness and connectedness.  There are some very good applications and provider websites to help you take a holistic view of your financial picture and help you stay on track toward your financial goals.  You can include savings, investment, retirement and education accounts, credit card balances and credit scoring, home mortgages, property / casualty and life insurance.   If you haven’t set it up already, ask for access to VWG’s client portal which contains this and more.  We can provide written and live tutorials to help you get started.

Watch & listen – a plethora of helpful and educational resources are available through the internet, email blogs, podcasts, online videos and books.  The range of financial topics covered is mind-boggling.  Do a bit of research, then choose a few and commit yourself to regularly watching, reading, or listening.

Connect with your VWG advisor – as a majority female team with 9 working mothers, VWG is positioned to support women on their financial journeys.  We want you to feel comfortable with your financial plan.  We want you to become educated on your investments and engaged in the choices you will need to face over the coming years.

¹ Women & Investing. New York Life Investments, March 2019.

² Visualcapital.com