Financial empowerment tips for women

Women are gaining significant financial power, with 50% of American households headed up by women, and women controlling more than $10 trillion of US households’ financial assets.^1,2 By 2030, it’s projected that women in the US may control almost $30 trillion in financial assets.³ But at the same time, women face unique financial challenges, especially when preparing for retirement.

Women tend to be paid less than their male counterparts: as a result, they’re able to save less.⁴ Many may leave the workforce temporarily to have children, which also reduces opportunities to save. But with a longer average life expectancy than men, women may need more money set away.⁵

So, how can women become more confident in financial decision-making, and set themselves up for a healthy financial future? Here are some tips that can help any woman — or man — feel more empowered.

Define your values and identify your goals

Redefining your financial attitudes takes some work. You may have to unlearn long-term habits, and change how you think about money in fundamental ways. It starts with defining what you value. Do you want to live a healthier lifestyle? Provide greater stability for your family? Feel more confident and less stressed? Tapping into those motivations can help you stay the course as you make changes to your financial behaviors.

It also helps to know what you’re working toward — maybe it’s a new home, early retirement, higher or continued education, or starting a new business. Be sure to keep your goals SMART: specific, measurable, achievable, relevant, and time-bound.

Increase your knowledge

Even though women control the financial assets of about a third of total US households, only 48% feel confident about their finances, and just 28% feel empowered to act.^6,7 It helps to seek out personal finance advice from a reliable source. Sign up for a financial literacy class, or investigate budgeting apps and software to understand your cash flow. A reputable financial professional can assess your situation and help provide guidance, as well.

Negotiate your salary

it’s well known that women still make less than men, earning only 82 cents for every dollar earned by men.⁸ Despite the notion that women are less inclined to advocate for higher pay, long believed to be a primary contributor to the gender pay gap, new research reveals women are now more likely than men to ask for higher compensation; however, men still out-earn them.⁹

This revelation is less than encouraging, but also suggests it’s never been more important for women to continue to speak up. Do some research to see what people in comparable roles are earning, then use the information to start a conversation with your boss about what you’re worth.

Build your protection

According to the Life Insurance Marketing and Research Association (LIMRA), only 47% of US women aged 18-75 own life insurance: this is 11 points lower than men’s reported life insurance ownership rate.^10,11 Fifty-six million US women say they need life insurance, or need more life insurance, and only 22% of women say they are “very knowledgeable” about life insurance.^12,13 To bridge this gap, a good starting point is to discuss the fundamentals and your insurance options with a financial professional.

There are living benefits to life insurance too, and with other types of life insurance, these can be an advantage for unforeseen events. For example, with whole life insurance, your coverage lasts your entire life, and as you pay monthly premiums over time, a portion of your payments accrues as a cash benefit.¹⁴ You may be able to use this money to cover expenses if an emergency arises, allowing you to support yourself during your lifetime, and help provide financial protection for your loved ones too.

There’s also disability insurance to consider. An income protection policy can provide you and your family with income in the event you can no longer work, even temporarily, due to an accident or illness. If you’re young or live a careful life, perhaps this kind of protection seems unnecessary. But keep in mind that approximately 25% of workers in their 20s today may face a disability at some point in their career.¹⁵

Not every woman earns outside the home, but women who stay at home are major contributors too. One estimate finds that if stay-at-home partners were paid a salary based on the services they provide, they would earn approximately $178,000 a year.¹⁶ If a woman who works at home had to stop due to an unforeseen event, everyone in the family would be impacted. To protect your family from this kind of emergency, review the option of spousal coverage with your financial representative.

Plan for the future

Since women tend to live longer than men, the chances of them outliving their savings are much higher. Life expectancy at birth in 2021 was 73.2 years for men and 79.1 years for women.¹⁷ This means that when it comes to saving for retirement, women need to think of a longer horizon than 20 years; depending on their retirement age, they may spend 30 years or more in this life phase.

Research shows while women perceive themselves to be equally as financially independent as men, they are still 40% more likely to experience financial stress than their male counterparts.¹⁸ Alleviating that stress can start with following a few prudent steps.

By being honest about your current financial situation, understanding your fears and motivators, crafting a financial strategy, and then following through, you can begin to move from overwhelmed to more financially confident.