Money, Honey: Women’s Guide to Financial Freedom

Written by Karlisle Morocco

I was drawn to a career in financial planning because I'm passionate about empowering others to achieve financial stability and security. I believe that everyone deserves access to expert guidance and support in managing their finances, and I'm eager to make a positive impact in my clients' lives. Additionally, I appreciate the flexibility and work-life balance that a career in financial planning can offer, allowing me to prioritize my own well-being and family responsibilities. As a woman in finance, I'm also committed to serving as a role model and mentor to other women who may be underrepresented in the industry, inspiring and supporting them to pursue their own goals and aspirations. By combining my passion for helping others with my interest in finance, I aim to create a fulfilling and purpose-driven career that makes a lasting difference. 

Women's financial planning needs and goals can differ significantly from those of men, yet they are often underserved by the financial industry. Research shows that women tend to live longer, earn less, and have more caregiving responsibilities than men, making it essential to have a personalized financial plan that addresses these unique challenges. By collaborating with a financial planner who understands their distinct needs and goals, women can create a secure financial future, achieve their goals, and enjoy peace of mind. Below I have outlined the benefits of women working with Financial Advisors: 

Long-term care

Women disproportionately fill caregiver roles, providing emotional Labor and support to family members, friends, and communities. According to the National Caregiving Alliance: 

• 75% of caregivers are female 

• Women spend 50% more time caregiving than men 

• 1 in 5 women are caregivers, compared to 1 in 7 men

Caregiving can impact women's: 

• Career advancement and earning potential

• Mental and physical health 

• Social connections and relationships 

Financial independence

Financial independence is a vital aspect of a woman's life, empowering her to take control of her financial future and make choices that align with her values and goals. It provides a sense of security, autonomy, and freedom, allowing her to pursue her passions and interests without being limited by financial constraints. 

Financial independence also promotes equality, reducing reliance on others and bridging the gender wealth gap. Moreover, it enables women to model positive financial behaviour for future generations, teaching them the importance of self-sufficiency and financial literacy. By achieving financial independence, women can break free from financial stress and anxiety, leading to improved mental and physical well-being. Financial independence is a key factor in unlocking a woman's full potential, allowing her to live a more fulfilling, purpose-driven life.  

Financial Education

Women should prioritize learning about personal finance and investing. Financial education provides numerous benefits, including: 

• Improved financial literacy: Understanding financial concepts, products, and strategies. 

• Better financial decision-making: Making informed choices about saving, investing, and managing debt. 

• Wealth creation: Building assets, investing wisely, and growing wealth over time. 

• Financial independence: Having the freedom to pursue goals and dreams without financial constraints. 

• Reduced debt: Managing debt effectively, avoiding predatory lending, and improving credit scores. 

• Improved credit management: Understanding credit reports, scores, and responsible credit behaviour. 

• Increased confidence: Feeling empowered and confident in managing one's finances. 

• Better financial habits: Developing healthy habits, such as regular saving, budgeting, and investing. 

• Protection from financial scams: Recognizing and avoiding fraudulent schemes and predatory practices. 

Financial Protection

Financial protection is vital for women as it provides a safety net against life's uncertainties, ensuring they can support their financial stability and independence. Women are more likely to experience financial shocks, such as divorce, widowhood, or caregiving responsibilities, which can significantly affect their financial well-being.  

Financial protection, including insurance, emergency funds, and legal safeguards, helps women mitigate these risks and avoid financial devastation. It enables them to continue supporting themselves and their loved ones, even in the face of unexpected events. Moreover, financial protection empowers women to take calculated risks, pursue their goals, and make choices without fear of financial ruin. By prioritizing financial protection, women can create a secure foundation for their financial lives, ensuring they can weather any storm and achieve their long-term aspirations. 

Investing

The reluctance of some women to invest can be attributed to a combination of factors, including a lack of financial knowledge, risk aversion, and fear of loss. Societal expectations and caregiving responsibilities also play a significant role, as women are often socialized to prioritize saving over investing and may feel obligated to focus on family needs over personal financial goals. Additionally, women's lower earning potential and limited exposure to investing opportunities can further worsen their hesitation. As a result, women may doubt their ability to make informed investment decisions, fearing they are not in control of their financial futures.  

These barriers can lead to a cycle of financial uncertainty, making it essential to provide women with education, support, and resources to empower them to take control of their financial lives and confidently invest in their futures. Women may be more risk-averse, but investing can help grow wealth over time. 

“Women are less willing to take risks than men because they are more sensitive to the pain of any losses, they might incur than any gains they might make”, new research from the University of Bath School of Management shows. 

Longer Lifespan

On average, Women's average life expectancy is 81.1 years, compared to 76.1 years for men (source: World Health Organization), 70% of women outlive their spouses (source: National Centre for Women & Retirement Research). Women are more likely to spend more years in solo living arrangements, with 47% of women aged 75+ living alone (source: US Census Bureau) Which means they need to plan for a longer retirement and potentially more years of healthcare costs. This increased lifespan also means women are more likely to outlive their spouses and need to plan for solo living expenses.  

Retirement savings

Saving for retirement can be a vastly dissimilar experience for women compared to men. Women often face unique challenges, such as lower earning potential, career interruptions for caregiving, and longer lifespans, which can result in lower retirement savings. Women are more likely to prioritize short-term financial needs, such as paying off debt or supporting family members, over saving for retirement. 

In contrast, men may enjoy higher levels of employer superannuation contributions initiative-taking and intentional about their retirement planning to ensure a secure financial future. 

Seeking Professional Advice

Women may feel more vulnerable working with financial advisors, it is important to do your research when selecting an advisor, you will want to work with someone who takes a comprehensive approach, evaluates your lifestyle and goals. An independent Financial Advisor is recommended as they are fully independent, having no affiliation with a product or firm like a bank, brokerage, or insurance company. This means the advice is genuine and the best advice for you, not the advisors financial benefit. 

Key Take Aways

Increasing financial literacy through courses, workshops, or reading materials can empower women to make informed financial decisions. Many resources are available specifically tailored to women’s financial needs. Some great resources include moneysmart.gov.au and the womens financial toolkit and womentalkmoney.org,au.  

Financial planning empowers women to take control of their financial lives, achieve independence, and secure their future. Women's unique financial challenges, such as lower earning potential, career interruptions, and longer lifespans, make planning essential to ensure they do not fall behind. By prioritizing financial planning, women can make informed decisions about investing, saving for retirement, and managing debt. This, in turn, enables them to achieve their goals, whether it is starting a business, supporting their family, or simply enjoying a comfortable retirement. Moreover, financial planning helps women build resilience against unexpected life events, such as divorce or widowhood, and ensures they can maintain their standard of living. By taking charge of their finances, women can break free from financial stress and anxiety, unlocking a more confident and fulfilling life. 

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The information in this article is general information and does not take into account any person’s individual situation. You should always do your own research, or seek professional advice to assist you in making an informed decision about what suits your needs.