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STREET$MARTS

Women & Finance: The Basics

Emily Lambert, IACCP®, Vice President, Operations and Chief Compliance Officer

Hi and welcome to today’s episode of Street$marts, with Howe & Rusling. I’m Emily Lambert, Chief Compliance Officer at Howe & Rusling. In today’s episode we want to focus on Women & Finance. It is predicted that by 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess, a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States! 

Women have been driving significant change in recent years so let’s take a quick second to review some of the progress made in the not-so-distant past:  

  • In the 1960s women gained the right to open a bank account  
  • In the 1970s women were eligible to open a credit card in their own name  
  • The percentage of women with bachelor’s degrees at age 18 to 33 nearly doubled from the Baby Boom to the Millennial generation 
  • The gender wage gap narrowed from 33 cents to the dollar in 1980 to 15 cents to the dollar in 2018 

Even more impressive, though: today, women graduate in higher numbers than men from college and graduate school, accounting for almost 60% of recent degree earners. This rise in education led to a significant increase in women’s earnings as well so it is safe to say women are now an active part of the workforce and economy as a whole.  

However, today’s reality is women still make less money AND live longer than men, meaning the financial deck is continually stacked against women. In the US, women outlive men by an average of five years and the most recent figures place the average women’s earnings at around 80% of the average man’s. 

But here’s the good news: women are taking steps to build wealth and bridge the gap. In fact studies show that 2/3rds of women are taking steps to help their money work harder to grow through investing. Recent years have seen unprecedented growth in the number of women opening up investment accounts and contributing record-high averages to workplace retirement accounts.   

Even better news:  When women do invest, they see impressive results. The data shows that on average, women outperform their male counterparts by 40 basis points.  

Women are poised to achieve even greater financial success in the decades to come, so let’s talk about what you can do now to help set up continual future success:

Education

The goal here is simple: strive to increase your financial literacy so that you are better equipped to know what you can do to reach your personal goals, without relying on a partner to do so. We love to learn and we love to teach at Howe & Rusling so check out our website to see what books we’re reading and podcasts we’re listening to if you need a place to start.  

Build your team 

A financial planner, tax accountant, and even an attorney can help you keep your arms around the different aspects of your financial goals. Build those relationships now, find someone you trust, someone you feel comfortable asking questions to, someone who will help you navigate all of life’s unknowns for years to come. 

Make a plan

A financial plan is a powerful tool.  This plan will act as a road-map, a guiding light to help you make decisions about your financial life. The plan will help you make the decisions you need to reach the goals you are aiming towards. Yes, the plan will most likely change and evolve once it is put into motion but the act of clearly defining your long-term goals and objectives is crucial for long-term financial success.  

Stick to the plan and stay the course

Of course financial plans change overtime but they should change purposefully as your goals, objectives, and time horizons change.  Stay focused on your priorities and goals laid out in the financial plan. 

    Women’s longevity, compounded by the pay and wealth gaps, makes it even more critical for women to take the necessary steps to achieving financial wellness. When surveyed, women’s most common regret was not investing more of their money and not looking for financial education and solutions that align with their values and priorities. We can confidently say having a financial plan is critically important to achieving long-term financial goals and it is never too early, or too late, to get started. And working with women specifically is one of our passions here at H&R. So, thank you for tuning in to today’s episode of StreetSmarts, and if you’re interested in learning more, we’d love to hear from you!  

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    from you.

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