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Why Financial Planning Is Different for Women

Despite studies showing that women are, on average, more diligent financial planners and savers than their male counterparts, women continuously get the fuzzy end of the lollipop when it comes to their long-term financial plans. A Fidelity Investments study [1] showed that women saved an annual average of 9 percent of their paychecks, compared to an average of 8.6 percent saved by men. So why is it that women tend to have a harder time preparing for their financial futures?

Despite efforts to close the gender gap, there are still differences that women must take into consideration when putting together a long-term financial plan. From the economic disadvantages that come with their typically longer lifespans and typically smaller paychecks, women have to be especially diligent and strategic.

By being mindful, remaining knowledgable, and seeking guidance when needed, here are three steps women can take to prepare themselves for a secure financial future.

  1. Maintain a Personal Financial Plan

As individuals, the burden of our financial situation, plan, and future ultimately falls on us. Yes, there are friends and family to fall back on. Yes, there are professionals to offer their advice. But first and foremost, you must take it upon yourself to set a DIY plan in place. This involves staying on top of your budget, keeping track of any debt, paying your bills on time, planning for retirement, creating an emergency fund…the list goes on. Personal financial plans do not come in one-size-fits-all packaging. Each person’s unique situation will require an equally unique plan. And that plan starts with you.

  1. Stay Curious, Stay Knowledgable

According to the same study [1] mentioned above, “88 percent of women say more financial education would provide them with greater confidence in managing their money.” Knowledge really is power. On the flip side, a lack of knowledge can be seriously detrimental. Because women often have additional financial burdens to consider (think caring for aging parents or young children, saving for a longer life expectancy, etc.) it’s doubly important to be prepared. For example, if a single mother of two lost her job and didn’t have an emergency fund in place, she could find herself stuck taking out costly loans that had the potential to bury her in debt. If a woman of the “sandwich generation” — a term used to describe middle-aged adults who care for both elderly parents and children — had to dip into her retirement savings early to care for her family members, there could be negative tax consequences that would do her more harm than good in the long-run. Understanding the consequences and caveats of financial decisions can be the difference between making a smart choice and a poor choice that will haunt you down the road.

  1. Secure Professional Help

Financial planning is more than just creating and sticking to a budget or living within your means. It includes investment strategy, tax strategy, retirement planning, and all of the moving gears that interconnect the individual pieces of your financial puzzle. And yes, it can be overwhelming and confusing. That’s why seeking financial help from a fiduciary advisor is so important.

Financial Planning With The Humphreys Group

October is National Financial Planning Month, making it an ideal time to review your financial situation and make adjustments accordingly. At The Humphreys Group, we specialize in helping women to take control of their financial future, no matter what their personal situation looks like. We work with clients to help them create the life they dream about by thoughtfully crafting financial plans and investment strategies that will support their vision. If you’re interested in becoming a Humphreys Group client, or if you’re a current client looking to revisit your plan, please get in touch with us! [2]