As we celebrate Women’s History Month, it’s crucial to recognize the strides women have made toward equality and empowerment. That includes the realm of finance, which I have written about recently. Yet, it’s important to recognize that gender disparity still exists in financial planning and wealth management. Empowering women’s financial futures is not just about promoting financial literacy; it’s about creating strategies that support long-term wealth management and financial independence, which is what we’ll dig into in this article.
The Current Landscape
Despite progress in many areas, women often face unique challenges in financial planning, stemming from factors such as wage gaps, career breaks for caregiving, and longer life expectancies. These challenges highlight the need for tailored financial strategies that cater to women’s unique circumstances and goals.
I also find it critical to remind women that there is a shift underway which means that women will control 75% of discretionary spending by 2028. At the same time, 49% of women have said that their mental health has suffered due to financial stress. Combining these two statistics, I believe it is more important than ever for women to focus on long-term wealth management. Doing so can lead to feelings of greater confidence in making financial decisions, as well as less anxiety related to financial security.
Strategies for Long-Term Wealth Management for Women
It’s important to note that the following strategies can apply to anyone, not just to women. However, for some of the reasons already mentioned, undertaking the steps mentioned below for long-term wealth management may have a more significant impact on a woman’s financial security.
1. Embrace Financial Education
Knowledge is power, and this is especially true when it comes to financial planning. Women should seek out resources, workshops, and courses to build a strong foundation of financial knowledge. Understanding the basics of budgeting, investing, and retirement planning empowers women to make informed decisions about their finances. (Reading our Flourish Wealth Management blog is a helpful first step, and listening to my podcast may also prove useful!)
SEE ALSO: Beyond Dollars and Cents: Building a Financial Plan Aligned with Your Values
2. Start Investing Early
The power of compounding interest means that the earlier you start investing, the more potential your money has to grow over time. You’ve probably heard this advice before, but have you put off developing your investment strategy simply because of all the options and the time it takes to sort through them? From stocks and bonds to mutual funds and ETFs, a financial advisor can help you distill the options that make sense for your financial circumstances and goals, creating a diversified investment portfolio that aligns with your risk tolerance and your long-term wealth management goals.
3. Plan for Retirement
With longer life expectancies than men, women need to plan for a retirement that could potentially last 30 years or more. This includes maximizing retirement savings accounts, such as 401(k)s and IRAs, and being strategic about when to start claiming Social Security benefits.
4. Build a Personal Emergency Fund
An emergency fund is essential for financial security, providing a buffer in case of unexpected expenses or income loss. Women should aim to save at least three to six months’ worth of living expenses in a readily accessible savings account.
SEE ALSO: Women and Money: 5 Common Financial Fears
5. Consider Health Care Costs
Planning for health care costs in retirement is critical, especially as women typically live longer, as noted above. Long-term care insurance and health savings accounts (HSAs) are two options that can help manage these expenses in later years, but it’s smart to review all your options alongside a trusted financial advisor to find the tools that make sense for your needs.
How to Know if You Should Seek Professional Advice
Not every woman feels comfortable talking about money, and it’s common to feel as if you don’t know enough. These factors can make the prospect of working with a financial professional feel overwhelming. Remember that asking questions and seeking information are two of the best ways to find financial empowerment and develop a long-term wealth management plan you can feel confident in – and the right financial advisor will actively work toward empowering you in these ways, too.
I advise everyone, women and men alike, to interview at least three prospective financial advisors before making a choice. Women should look for advisors who understand their unique challenges and can provide strategies for overcoming them.
Empowering Women Through Financial Independence
Financial independence is a key component of empowerment, providing women with the freedom to make choices and live on their own terms. By adopting smart financial strategies and focusing on long-term wealth management, women can overcome the unique challenges they face and secure their financial futures.
Let’s use Women’s History Month as a reminder of the importance of financial empowerment and the steps we can all take to achieve it. Together, we can pave the way for a future where financial equality is a reality for all women.
Would you like to know more about how Flourish Wealth Management serves the women (and men!) we work with? Please reach out to schedule a conversation. We look forward to hearing from you!
