Financial Planning for Women
For many, taking control of their finances can feel like a daunting task. This may be especially true for women. Many experts in finance have noted that women historically would allow the men in their lives to manage their money. But as wealth in the United States continues to flow towards women, a movement is spreading to empower them by building their financial literacy and taking the reins to their financial well-being.
It won’t be long, the experts say, before women hold the majority of wealth in the United States. According to Fast Company, the Washington Post, and Ellevest, women are best positioned to rake in the most money as the “Great Wealth Transfer” moves wealth from Baby Boomers to younger generations. And, as women continue to make a greater impact on the business world, particularly here in Utah, and enjoy a longer average lifespan than men, many won’t need to depend on an inheritance to build their wealth. They’ll do it on their own merit and ability.
Still, as the movement continues, education will be essential for women to exercise their financial fitness muscles and make the most of this exciting time. For women eager to grab a hold of their financial future and take control of their destiny, here are some tips from the experts at Altabank:
Get in the Game
Gone are the days when women would hand the keys to their finances to their husbands, allowing them to manage all their money with no input. A recent survey cited by Forbes found that 99% of female respondents in households with over $1 million in investable assets are actively involved in the financial planning process.
Women in relationships should be engaged frequently in financial decisions with their partners. Wealth building is a shared responsibility for everyone in the household. The research shows that households who work together and have open communication about their finances do better in the long run.
For single women, being educated and making smart moves with their money is especially important to financial well-being.
How Women Build Wealth at Every Stage of Life
Our journeys in life all look different, but we can all expect to face certain challenges and opportunities at each stage. Knowing what could be coming and how best to plan and proceed is an essential part of discovering financial success and finding happiness along the way.
Here are some things women may want to consider in each decade of their lives:
20-Something: Building Wealth Amidst College Debt, First Jobs, Moving
Exiting your teenage years and heading out into the world as an adult is an exciting time. It also might be the best chance you’ll have to get ahead of your finances. You can expect to have some financial responsibilities, but not as many as you’ll face later in life.
Still, this is the time to learn good habits that will last for the rest of your life. It’s recommended to start living on a budget and saving money early. When you get your first job, find out how much your employer will match your 401(k) and work towards reaching the maximum by increasing your contributions each time you get a raise.
And here’s another tip: ask for raises. Your future self will thank you.
30-Something: Building Wealth Amidst Marriage, Buying a Home, Starting a Family and Building Your Career
For some—especially in Utah—starting a family can come at an earlier age. But by the time you reach your 30s, you can expect your financial responsibilities to significantly ramp up. If you have the means and the opportunity is right, you may look into home ownership. Having an asset, such as a house, can go a long way towards building eventual wealth. You may also want to get more serious about other investments such as the stock market or private equities.
However, this decade may come with more challenges. If you choose to start and grow a family around this point in your life, it may be necessary to take time away from work.\
40-Something: Building Wealth Amidst Kids’ Activities and Education, Divorce or Retirement Planning
Life continues to change as you become more “adult” in your 40s. You might be juggling motherhood, being married, and having a full-time or part-time career or even blazing your own unique trail in adulthood.
With all that to consider, you may find that family matters occupy a majority of your financial management. If you started a family in your 20s or 30s, it’s possible you’ll soon have children getting ready to pursue opportunities in higher education. You’ll want to have a plan for that.
It may well be the case that you and your partner decide to part ways and get a divorce—the average age of people divorced in 2022 was 46 for men and 44 for women and in 2024, the divorce rate was measured at 43%. When couples split, women typically suffer the most financially, according to Forbes. That could greatly impact your current and future situation.
And, as you reach the midway point of your career, thinking about retirement will be more and more pressing.
50-Something: Building Wealth Amidst Aging Parents and Paying for College?
In your 50s, the changes don’t stop. If you have kids, they will likely be off to their next chapter around this time. The planning you will have done in your 40s can really pay off, especially if you set money aside to pay for their continued education.
However, statistics show that this may be a time of great and saddening change. Should you become widowed at this time, finances will be the last thing you’ll want to worry about. It’s also possible that your parents will age and need assistance as they transition into their golden years. These events are much easier to deal with if you plan ahead.
Retirement will also get closer and closer. If you’re not building and investing in your nest egg in preparation, this is the time to get serious about it.
60-Something: Building & Maintaining Wealth for Retirement
Career-wise, you’ll probably reach the finish line at some point in your 60s. This is your time to enjoy the fruits of your labor and enjoy retirement. You’ll be grateful for all the planning and saving you did earlier in your life. However, now that you’re essentially living off of your savings for the rest of your life, you’ll want to stretch it out as much as possible.
Your income will likely be fixed. Getting a grip on your expenses and getting those fixed as much as possible will be key. Financial experts, such as those at Altabank, recommend covering as much as you can with income from Social Security, annuities, and pensions. Having a solid investment plan is also a must at this point in your life.
Of course, there’s no universal, one-size-fits-all plan when it comes to retirement. Meeting with an Altabank expert can help you get a better understanding of what your finances during retirement will look like. And the sooner you start planning, the better off you’ll be when retirement, along with all your other major life events, takes place.
Educational Resources
Sources about best practices to build financial freedom are becoming easier to find and more specialized for women. SheMoney, a female-founded financial education organization based here in Utah, is committed to helping women blaze a trail to financial freedom.
U.S. News provided a helpful slideshow in 2014 packed with information that still holds up today in its Money section, found here.
This recent article from Forbes also contains useful tips on household collaboration, cultivating financial confidence, and more.
And of course, a trusted partner at Altabank can answer any questions you may have at any stage in your financial journey.
What Women Should Avoid When It Comes to Financial Planning
Above all, women should not be passive when it comes to managing their finances. This is particularly true whether you’re one of the many expecting the good fortune of wealth transfer or finding fulfillment in your hard work and savviness. Women are continuing to reshape the economic and social landscape of our state.
Take control now and reap the rewards at every step of your journey. Reach out to Altabank to get started.