Americans have long struggled with financial literacy, and despite the growth in investment, banking and budget apps, the problem is only getting worse.
According to a 2023 study by the National Financial Educators Council, 38% of participants said their lack of financial literacy cost them at least $500 in 2022, with the average reporting a loss of $1,819 — or almost $500 more than the previous year’s average of $1,389.
Though financial literacy is a widespread problem, women tend to struggle with finances more often due to several factors, including the gender wage gap, lower rates of retirement savings and gender stereotypes that make women feel less confident in managing money. Since women live, on average, 5.9 years longer than men, the sooner women feel confident in managing their investments and household finances, the better off they will be.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
April is Financial Literacy Month, which is a great time to focus on getting your financial house in order. Here are three simple strategies to help women take control of their financial futures, especially those who are new to managing their money:
1. Gather the necessary paperwork.
Many women who haven’t previously handled their household finances find themselves lost and overwhelmed following divorce or the death of their spouse. They may not know what investments they have or even what the passwords to their accounts are.
Obviously, it’s tough to wrap your head around everything while also dealing with the emotional strains of divorce or a loss in the family — that’s why it’s a good idea to be proactive about finances. Women who are new to managing their household finances should begin by compiling their investment and financial statements, which they likely already did during tax time.
Beyond investments, they should gather all information related to cash holdings, including checking and savings accounts and monthly expenses — all inflows and outflows.
They can also start writing down all passwords to their accounts. They could use this as an opportunity to cancel any subscriptions they’re not using.
2. Find the right adviser.
One of the first steps to establishing stronger financial footing is to build a relationship with a financial adviser who can help set achievable goals.
When evaluating whom to work with, look for an adviser who is open and willing to collaborate in all aspects of your financial life, such as buying a home, paying for college and planning for retirement.
Most women are focused on the holistic picture of their lives, not just investment performance, so it’s important to look for an adviser who has the wherewithal to support you in all aspects of financial management, including budgeting and goal setting.
3. Educate future generations.
Women, especially those who haven’t actively managed their finances before, will likely want to teach their children early about the importance of finances and investments. Speak to your financial adviser about involving them in the financial planning process.
The younger they start, the better path you’ll put them on as they begin to make important decisions around issues such as student loans, credit, mortgages and investments. It’ll also better position them to manage the legacy you leave to them.
During Financial Literacy Month, women have an opportunity to consider their financial picture and take steps to put themselves on the right track.
While all Americans can benefit from sound financial advice, women have unique hurdles to prepare for retirement and ensure they are on the path to financial freedom.
Whether you’re single, married or widowed, it’s never too early to invest in your financial literacy so that you can manage your money armed with confidence and conviction.
Emily Glassman is a senior advisor at Ballast Rock Private Wealth, which provides personalized private wealth management solutions, curated investment access and unique expertise in alternative investments.
This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Past performance does not guarantee future performance. Investments involve risk. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Investment Advisory Services are offered through Ballast Rock Private Wealth, a registered investment adviser.
Related Content
-
Five FAQs About 529 College Savings PlansThanks to recent policy changes, families have more options for what to do with money sitting in tax-advantaged 529 accounts.
-
7 Best Places in the US for Wellness Tourism — Beyond CaliforniaCalifornia doesn't have a monopoly on wellness tourism. These U.S. retreats offer exercise, relaxation and good food in stunning scenery that might be closer to home.
-
To Future-Proof Retirement Security, We Need Better StrategiesWith retirees living longer and the inequalities that affect women and people of color, the retirement system needs some optimization. Here’s what would help.
-
Here's Why We All Win When Charitable Dollars Go to WomenGiving to charities for women and girls not only has a lasting impact on their lives — it also benefits society as a whole. Here’s how to start investing.
-
For a More Secure Retirement, Build in Some 'Safe Money'To solidify your retirement plan, write it down, reduce your market risk and allocate more safe money into your plan for income.
-
Five Steps to a Mindfully Fearless CareerIf, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Six Ways to Optimize Your Charitable Giving Before Year-EndAs 2024 winds down, right now is the time to look at how you plan to handle your charitable giving. The sooner you start, the more tax-efficient you can be.
-
How Preferred Stocks Can Boost Your Retirement PortfolioHigher yields, priority on dividend payments and the potential for capital appreciation are just three reasons to consider investing in preferred stocks.
-
Structured Settlement Annuity vs Lump-Sum Payout: Which Is Better?As the use of structured settlement annuities grows, it can be tough to decide whether to take the lump sum to invest or opt instead for guaranteed payments.
-
What to Do as Soon as Your Divorce Is FinalDon't delay — getting these tasks accomplished as soon as possible can help you avoid costly consequences.
