“By 2028 the average American woman is expected to out-earn the average American man.” – nielsen.com
It’s no secret that women are already winning with money, but according to an article on CNBC, “of the 63 million wage-earning and salaried women age 21 to 64 working in the United States, only 45 percent participate in a retirement plan, and they have 50 percent less in their retirement savings accounts than men.” This is partly due to the fact that women often spend less time in the workforce to care for young children and aging parents. However, it’s also because the majority of women don’t trust the male dominated financial services industry.
With that in mind, here are three ways women can win with money.
1. Start off with a financial counselor or money coach
I don’t want to “toot my own horn,” but financial counselors and coaches are a unique breed in the world of finance. The Association of Financial Planning and Education (AFCPE®) says the role of financial counselors is to:
- Address your immediate money challenges.
- Create a plan to achieve your unique goals & dreams.
- Build a sustainable foundation for long-term financial well-being.
“When you work with an AFC® professional you receive financial education and guidance specific to your unique situation and needs. An AFC will never sell you products” (afcpe.org)
This is a great starting point because you can ease into a trusting, professional financial relationship without the fear of “being sold” unnecessary products and services that don’t fit your unique needs. When you’re ready, a financial counselor can refer you to other trusted financial professionals such as Financial Advisers and Certified Financial Planners (CFP).
2. Seek retirement savings alternatives
Because more women than men take time off to care for children and aging parents, they lose out on company-sponsored retirement plans. This, unfortunately, reduces the amount of money women are able to save, even though women tend to outlive men. There is a retirement savings alternative that women can take advantage of during the years they aren’t working or are under-employed.
Spousal IRA – This is a regular IRA account, but a great option for those SAHM because you can contribute based on your spouses income.
- Must be married
- File a joint tax return
- Must be under 70 1/2 years old (for a traditional IRA)
- Your spouse must earn at least what’s contributed annually.
3. Manage your money wisely
Women are great at multi-tasking (picture holding a baby while talking on the phone and cooking dinner), but this can sometimes distract us from the daily money management habits that contribute to long term stability. Continually find ways to reduce expenses, track spending, and be accountable for your financial goals! Remember, it’s the little things that can sink a big ship!