Women are a growing economic force and expected to add about $6 trillion in earned income globally over next five years according to the research by the Boston Consulting Group.
According to one survey, 90 percent of women are the chief bill-payer and shopper for the household And yet they lag behind men in actions crucial to building wealth and security, such as investing and having a long-term money plan..
This phenomenon is termed as “The female financial paradox”.
Experts have identified four key factors underlying the paradox:
- Women tend to be insecure about the subject of money;
- We focus on scrimping instead of investing;
- We rely too heavily on others for financial know-how; and
- We’re not always adept at translating abstract figures into concrete goals.
Financial Barrier No. 1: We Lack Confidence
So many women radiate competence and authority on a daily basis (brilliant doctors, strong managers, cool and collected stay-at-home mothers). But when it comes to this one particular subject, not so much. Take Amy, a 42-year-old senior manager based in New York City. “Money information just bounces off my brain,” she says. “It’s like I have a force field that won’t let it in.” She’s not alone. Even some of the most capable among us can become champion self-doubters when we have to talk about our money.
Many successful working single mothers in their 40s who didn’t have any long-term savings and refused to start planning for retirement. As a result, they lose a big-picture of retirement security completely,”
That desire to flee from financial planning means we aren’t always as well-informed as we should be. “Many women think that since they don’t know the language, they can’t ask questions—or they worry that their questions sound dumb,”
Those fears may be reinforced by frustrating encounters with the financial-services industry. For every helpful and plainspoken adviser or planner, there’s another who can be intimidating or condescending.
If money discussions make you feel nervous or clueless, you have to start talking about your finances more, not less. “To eliminate the intimidation factor, include topics of spending and saving in your regular conversation with your spouse or a trusted friend.
It also helps to have an adviser you can depend on, even if you contact her only once a year. Make sure your money pro speaks clearly, without excessive use of jargon or acronyms, and that you feel 100 percent comfortable talking to her.
The other thing that will give you more confidence in money matters? Knowledge. For starters, review your financial statements on a monthly basis so you know where you stand. Then consider picking up a personal-finance book or visiting a money-information website to school yourself in any concept that are eluding you.
Financial Barrier No. 2: We Sweat the Small Stuff
For women, being smart with money traditionally meant knowing how to stretch the family Rupee.
(Think of all mothers & grandmothers who managed to turn out amazing multicourse meals for large families with very limited finances.) “For generations, the idea was that men earned the money and women decided how to spend it,”
Today not much has changed. Women still make most of the household purchases, and many are master deal finders. The overwhelming majority of women—76 percent—regularly clip coupons, and 38 percent buy in bulk, according to a recent Citi Economic Pulse survey. “Sales and coupons provide the instant gratification of saving,”
“When they find themselves hitting up the sale racks, women need to remember that even the best deal they find is worth far less than a smart investment. While there’s certainly nothing wrong with getting your money’s worth, experts say that women need to move beyond worrying about nickels and dimes and start thinking big.
Financial Barrier No. 3: We’re waiting for Someone Else to Fix the Problem
“Often neither parent counseled daughters about saving or investing.
Some women have grown up “with the idea that they would be secondary earners and a man would be responsible for investing and long-term saving.
Thus most women were raised to believe that their husbands would handle the finances
Single women raised with this mind-set typically learn to take charge of their finances out of necessity, experts say. But even today some married women ignore such issues until they are forced to pay attention.
For many, that reckoning may come when they are least emotionally prepared to deal with it: after they lose a spouse through death or divorce. “Unfortunately, it takes a major life event to change their behavior.
Financial Barrier No. 4: We’re focused on Goals, Not Numbers
In the financial world, a great deal is made of the bold-faced number on your bank statement. And certainly women want to make money as much as the next guy.
“I don’t care about how much money I have on paper,”. “I want to know if I can make the choices that are important to me.” Can I afford to buy a new home? Send my children to college? Travel after retirement? These are the concrete goals that matter the most to us. and that means the financial conversations about saving and investing that we have with our planner or spouse need to be directly connected to the results we want to see in our lives,
That’s why it’s best to think specifically about what you would do with a pot of money. Make your financial goals as detailed as possible (including an estimated cost) to increase the likelihood that you’ll follow through with what’s necessary to achieve them.
For example, a woman in her 40s who couldn’t kick-start her retirement-savings plan until she envisioned spending her golden years in her own villa in her hometown Pune. “Once she calculated what she needed to accomplish that target—as opposed to a large, vague amount she had to save—she became less anxious and more proactive.
Being financially savvy doesn’t have to be about making more money just to increase your account balance. “Think of money as a tool to help achieve your goals, take care of yourself, and do things for the people you love,”.
Retirement planning for women is an important financial milestone and should be planned carefully. Women need to pay more attention to their retirement and finances so they can walk into their sunset years financially secured!
Thus, “Think of money as a tool to help achieve your goals, take care of yourself, and do things for the people you love even after you are retired from the workforce.
“Taking control of your money means to getting the life you want for rest of your life after your retirement.
