Women and Personal Finances

By many measures, women's lives have changed substantially in recent decades. According to a comprehensive government report called Women in America, although certain social and economic situations for women have improved, when it comes to personal finances, many women still face challenging hurdles.

Key report findings include:

• Women live longer than men but are much more likely to experience critical health problems that hamper their ability to work -- and to pass up needed care due to cost.


• Although the earnings gap between women and men continues to narrow, it's still significant: Among full-time workers, women's weekly earnings as a percentage of men's have increased from 62 percent in 1979 to 80 percent in 2009. (Those numbers represent overall average earnings in all fields, not what men and women are paid for doing the same job -- although such disparities likely still exist.)


• More women than men now graduate high school and earn college degrees, but far fewer women earn degrees in engineering, computer sciences and other higher-paying fields, which likely contributes to the wage disparity.


• Women increasingly are marrying later, having fewer children or remaining childless, yet they still are more likely to live in poverty than men, with single-mother families suffering the worst disparity.


• Women are less likely than men to work outside the home (61 percent vs. 75 percent in 2009) and are much more likely to work part-time and to take time off to raise children or care for aging relatives.

In a nutshell: Women tend to earn less and live longer than men so at retirement they often have less in accumulated savings, receive smaller retirement and Social Security benefits (which are based on lifetime earnings), and must spread out their money over a longer time period. Clearly, women need to take charge of their financial wellbeing. Here are a few places to start:

Develop a budget. Many tools are available to help track income and expenses. To get started, either download a budget spreadsheet template or use interactive, online budgeting calculators. For example, Practical Money Skills for Life, a free personal financial management program run by my employer, Visa Inc., includes budgeting calculators for everything from back-to-school costs to holiday expenses to retirement.

When you're ready for the next level of managing your finances, investigate software packages and online account management services like Quicken, Mint.com, Yodlee and Mvlopes. Some are free, while others charge a one-time or monthly fee. Some, like Mint and Yodlee, can be accessed online or by smart phone; others, like Quicken, must be accessed from a dedicated computer.

Plan for retirement. Time is your biggest ally when it comes to retirement savings, so get cracking. Start estimating your retirement needs by using online calculators, including:

• Social Security's Retirement Estimator, which automatically enters your earnings information from its records to estimate your projected Social Security benefits under different scenarios, such as age at retirement, future earnings projections, etc. You can also download a more detailed calculator to make more precise estimates.


• Check whether your 401(k) plan administrator's website has a calculator to estimate how much you will accumulate under various contribution and investment scenarios. If not, try the retirement calculators at Bankrate.com and AARP to determine your current financial status and what you'll need to save to meet your retirement needs.

Expect the unexpected. An untimely illness, accident or death can devastate your finances. If you depend on someone else's income -- especially if you have children -- make sure you both carry adequate life, health and disability insurance. If you're self-supporting it's particularly important to be covered against accidents or disability, since even a brief period without income could deplete your savings.

Obtain credit in your own name. "Treated responsibly, credit can become a safety net for all women whether they are single, divorced or widowed," says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling (NFCC).

Do your research. Many helpful personal financial education and management tools are available online, including:

• NFCC's MyMoneyCheckUp, a step-by-step assessment of your overall financial health and behavior in four personal finance areas: budgeting and credit management, saving and investing, planning for retirement and managing home equity.


• The Department of Labor's Women's Bureau offers many financial education resources for working women, including a program called Wi$eUp that targets younger women.


• Social Security's Website for Women provides information on retirement, disability and other issues -- in English and Spanish. You can also order or download their informative, free publication, What Every Woman Should Know.
  
• The Women's Saving Initiative, a program jointly developed by Heinz Family Philanthropies, the Women's Institute for a Secure Retirement (WISER) and Visa Inc. This free program features an audio- and e-book called What Women Need to Know About Retirement, which you can order on CD or download as a PDF or audio file.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

To participate in a free, online Financial Literacy and Education Summit on April 23, 2012, go to Practical Money Skills.

 

Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney

Comments

[Jan Cullinane]

04:46 PM on 01/28/2012

Women can become better negotiators. Women compare negotiating to "going to the dentist" while men compare it to "winning a ballgame." Negotiating a higher first salary can translate into hundreds of thousands of dollars by the time retirement rolls around. It's a skill that can be learned (I realize many women are excellent negotiators - this is for those who aren't). Read Linda Babcock's "Women Don't Ask" for more specifics.

Jan Cullinane, The New Retirement: The Ultimate Guide to the Rest of Your Life (Rodale)

[Jan Cullinane]

04:37 PM on 01/28/2012

Women can become better negotiatiors. Women compare negotiation to "going to the dentist" while men compare it to "winning a ballgame." A higher first salary can translate to hundreds of thousands of dollars more by retirement time.

Jan Cullinane, The New Retirement: The Ultimate Guide to the Rest of Your Life (Rodale)

[maori]

09:36 PM on 01/26/2012

I'm prepared for a meager, but honest living as a celibate teetotaler. Very few material needs.

[NWOslave]

08:54 PM on 01/26/2012

I'm going to address your article point by point.

Of the top fifteen leading causes of death, men lead in 12 categories, are tied in two and trail in one.

Please stop regurgitating the "wage gap myth." How many times does it have to be debunked? Women "choose" not to enter fields like engineering and comp science.

80% of the homeless are men, they don't even make it to the "poverty" level.

Taking time off for childcare is a "privilege" not an oppression.

Women earn less because they work less which is exactly why they live longer. In 1900 men on average men live 1 year less than women, todays it's 6 to 7 years. It is a privilege to work less and live longer.

[french queen13]

03:10 AM on 01/27/2012

Women aren't encouraged to enter fields traditionally male-dominated, too often, and do get paid less for the same work. Plus, the essential services that are seen as 'women's work' are too often paid poorly for that very reason.

Calling taking time off for childcare a privilege is ridiculous. How many men are prepared to interrupt their careers to be full-time carers? The default assumption is that women will do it, and it means a huge interruption to our ability to earn and save - it can put us out of the workforce permanently.

Working less and living longer is not a privilege when it means living in poverty, which is what too many women face.

[NWOslave]

05:43 AM on 01/27/2012

Men aren't encouraged to enter any fields either, they just do it. Men don't "interrupt" their careers for childcare because women are unwilling to support men to stay home. Living longer is always a privilege.

[KatherineH]

11:11 AM on 01/27/2012

You make a good point here. Women are also the default partners who volunteer to take care of the children when they are sick or just by default of having a child. They decide to stay at home which can have detrimental effects on their career when getting back into the workplace.

Sadly, the longer a woman stays out of work, the harder it is to get back into her field of choice. When deciding to have children, these are the issues that should be discussed ahead of time such that the proper planning is put in place to avoid issues when deciding to return to work.

We live longer, but those of us who stay at home with children to raise them ourselves also have the burden of sacrificing the time in our life during our highest earning potential.

[The Corporate Champion]

01:48 PM on 01/27/2012

Well said my man.

Feminists will say and do anything to come off as victims.

[Kellybelle22]

06:45 PM on 01/27/2012

Where did you encounter any "feminists" in the discussion or article above? I'm genuinely curious.

[Rachel4269]

03:24 PM on 01/26/2012

Very interesting post. Managing your finances can be challenging but the sooner you start the better off you will be in the long run; especially if you are on your own. It's encouraging to see how many resources are available to help women get on the right track.
http://www.dailymotion.com/user/MoneyMutual