Women & Money: Be Strong, Be Smart & Be Secure

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In celebration of Women’s History Month and International Women’s Day, we’re examining the challenges that women face on their path to financial security. Earlier this year, CIBC, one of Canada’s largest financial services provider, released a survey that sought to uncover existing gaps between women’s money concerns and life goals. Its findings reveal that the majority of its 3,200 respondents lack knowledge of financial planning, a shortcoming that is negatively affecting how women manage their personal finances.

Despite the majority of respondents agreeing with the statement that financial security is a strong contributor to their happiness, the survey revealed financial mistakes that we are all guilty of making.  Failing to save earlier in life and not investing when they were younger, were singled out as women’s greatest financial regrets. When asked what personal wealth advice they would offer their younger selves, 56 percent of respondents said “start saving earlier,” 50 percent said “start investing as soon as possible,” and 44 percent said “start planning for retirement earlier.”

The importance of planning for retirement through proactive savings and investment plans in well known, but many women continue to severely underfund their long-term financial security. The majority of respondents expressed confusion about how best to make their money work for them. Among the women polled, only 10 percent felt knowledgeable about investing, and just 15 percent felt confident about their retirement planning. Additionally, nearly half of women polled who own investments prioritize capital preservation and predictable returns. As retirement planning is a primary concern for many women, increasing knowledge about investment strategies and how to maximize long-term returns, are fundamental to financial wellbeing later in life.

The survey also revealed an added burden women face: making financial sacrifices for the sake of others. Seventy percent of respondents have made significant financial sacrifices, including reducing working hours and putting their careers on hold to care of loved ones, which can put them at a considerable disadvantage to men when it comes to saving for retirement. In fact, almost 30 percent of females polled said that they have reduced or stopped saving as a direct consequence of childcare or eldercare responsibilities.

Of course, the survey’s findings aren’t all dispiriting. Women are increasingly taking control of their household’s finances. Nearly 55 percent of respondents said they are primarily responsible for household budgeting, while 41 percent take charge of long-term savings goals and 39 percent decide how their household’s money gets invested.

Taking charge of your finances is more than a matter of strength, it’s a matter of necessity. According to the U.S. Bureau of Labor Statistics, women continue to earn 81 percent of what men earn. On top of that, women statistically live longer than men and often face discrimination in terms of career advancement opportunities. This means women have to work harder and save more money than men.

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4 Tips to Help You Achieve Your Financial Goals

So how can you take control of your finances and build a secure future for yourself and your loved ones? Follow these 4 tips of course!

Make Saving for Retirement a Top Priority – You can take charge of your financial future by taking full advantage of a company retirement plan. At a minimum, contribute up to what your employer will match. Ideally, you’ll want to set aside at least 10 percent of your annual income for retirement savings in your twenties and slowly increase that figure to 30 percent by the time you’re 40. The younger you begin saving for retirement, the better, but it’s never too late to start.

Invest as Much as You Save – No one likes risk, but many women are playing it too safe with their investments, potentially missing out on long-term gains that can help you better achieve your goals. For a goal like retirement with a long time horizon, you will ideally want a diversified portfolio that has strong potential for growth.

Work with a Trusted Financial Advisor – No one has time to learn the ins and outs of financial management. That’s why working with a qualified support team can be a great confidence booster as they walk you through the entire process of getting your personal finances aligned with your long-term goals. When looking for a financial advisor, make sure they’re a fiduciary, these advisors are legally required to always act in their clients’ best interests.

Create a Comprehensive Financial Plan – Many financial plans focus exclusively on investment portfolios, maximizing returns to help ensure that you achieve a competitive return on investment. But what you really should create is a comprehensive financial plan which goes far beyond saving and investing and helps you look holistically at the interrelated parts of your financial situation. A comprehensive plan reviews your income, expenses, investments, retirement planning, insurance needs, income taxes, and estate planning needs, and assesses how they all fit together within the context of your long-term goals.

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