Why Women Need Financial Planning More Than Men

Reviewing the book Smart Women Finish Rich can be a real eye-opener for many women about what their financial future might look like without just a little bit of pre-planning and awareness. The author, David Bach, shares some startling statistics that highlight the need for women to take a proactive approach to family budgeting, financial planning, and retirement savings.

Common Financial Myths Women Believe

  • Making more money is the key to being rich. Drawing from both statistics and his personal experiences in financial planning, Bach notes that the key to financial freedom is not what you might think. Rather than focusing on how much you make, he encourages a focus on how much you save. An important distinction.
  • Things will work out in the end. Bach states that women are more likely to fall into this trap believing that their husband, his retirement plan and pension, or Social Security will somehow provide for them at the end of their life. But most women who believe this, have never taken the time to find out for sure.

Both of these myths are dangerous and especially dangerous to women. As women are more likely to earn less than men, the belief that financial planning isn’t necessary, or can’t be effective because of a lower income, can hold women back from ever taking the first step towards planning for retirement and the future. And believing that things will just “work out” while never creating a viable financial plan, can be very detrimental if women do not know whether any safeguards are, in fact, in place.

Facts and Financial Mistakes Women Make

  • Women have fewer retirement benefits than men. Women are more likely to leave the workforce periodically to act as caregivers, and because of that, they usually do not have as many personal retirement benefits saved up as their male counterparts.
  • Women live longer than men. The average age of widowhood for a married woman is 56. And women are more likely to live into their 70’s and 80’s than men are.

So without financial planning and a wise savings plan, women will find themselves living longer, on less money! This is why it is vitally important for women to be in touch with where the family money is going, what is being saved, how those retirement funds are doing, and what equity, if any, is available to her should something happen to the current income.

Without some awareness of the current family financial situation, and planning ahead for future, unforeseen events, women are more likely to find themselves in a financially vulnerable position. Women should adopt a wise savings plan now, and consult a financial planner for tips and tricks to decrease spending levels and increase savings.