FEATURE — Money can be more of a barrier between spouses and partners than language or religion.
Insurer Allianz surveyed women in 2019 and found that 67% of female respondents reported worrying about their current financial situation versus 57% of males interviewed. A majority of those (81%) reported having a lot of stress when thinking about retirement planning.
This survey and others like it have brought some issues to light.
Women are typically more concerned about risking their nest eggs than their male counterparts. Risk aversion, especially in the productive earning years of a woman’s life, can mean that she won’t accumulate enough savings to last her through her retirement years. In the United States, the typical woman reaches her peak earnings at the age of 44. At that time, she will be earning, on average, $66,700, according to Payscale.com.
So if you are a woman planning to retire, what steps can you take to ensure that you don’t run out of money when it’s time to retire?
Have a money chat (or chats) with your spouse or partner
If you are married, engaged or in a committed relationship, you should discuss your concerns about finances. This talk should not be a forum for judgments or accusations about earnings or spending habits.
Instead, use this time to discuss your and your partner’s attitudes toward saving, debt, retirement and other key money issues. Talk about how your backgrounds helped shape those attitudes and how you can use your strengths and weaknesses to create more financial peace.
Become more money-savvy
Sadly, many Americans lack the basic financial literacy needed to make optimum money decisions. Fortunately, as the problem of financial illiteracy has entered mainstream consciousness, online courses and videos (many are free!) have popped up. Take advantage of these and others offered by your workplace, college or financial advisor.
Keep a daily log of expenses
If you find yourself saying, “Wow! What happened to my paycheck?” It might be time to start writing down your daily, weekly and monthly expenses. Much as it does for dieting and exercising, journaling creates a deeper awareness and can emotionally connect you to your money in a way that leads to better habits.
You’ll begin to see patterns and weaknesses and can address those more effectively. Plus, you will discover “fat” that you can trim and use to grow your retirement accounts. As financial literacy expert Christine Luken points out, it takes just $24.70 a day in unnecessary spending to add up to $10,000 for the year!
Practice diligent self-care
What does taking care of your physical, spiritual and mental well-being have to do with money management and retirement planning? Everything! The links between your financial well-being and the rest of you are well-established by psychologists. For one thing, taking care of your body and mind can help you work longer if you want to do so.
When you feel in shape, you will be more inclined to tackle the tasks associated with money management and retirement planning. You will also find more energy to work side gigs to make extra money, participate in social activities, or spend time with friends and family.
Establish a contingency fund
Emergencies happen to even the most well-planned, money-wise individuals. A few months of cash stashed away to see you through the unexpected helps you achieve a sense of well-being. An established emergency fund can rid you of the anxiety your brain creates around uncertainty.
Lose the black cloud of debt. One of the most common things contributing to money stress is having a lot of high-interest consumer debt. Imagine how much money you’ll free up when you make a concerted effort to reduce this debt.
Think about retirement now. It is never too early to think about retirement and consider using professional services. No matter what stage of your economic life you are in, it’s always good to find a guide for money matters.
There are many more ways women can enhance their futures by regaining control of their money. Be informed!