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
- Three Ways to Take Control of Your Money During Financial Literacy Month
- Six of the Best Budgeting Apps
- For a Good Time Managing Your Money, Call on These Apps
- Four Tips to Get Your Financial Wellness in Shape
- How to Build Your Financial House From the Foundation Up
-
Don’t Miss Apple and Walmart Back-to-School Tax-Free Holiday Savings this SummerSales Tax Select states host sales tax holidays during the summer. Here’s what you can purchase.
-
The Rule of Retirement InversionThe rule of retirement inversion says that to have a great retirement, you must ask yourself what would ruin a great retirement — and then plan to avoid it.
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case StudySusan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every AgeFrom toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
I'm an Investment Pro: Here's How Alternatives Could Inject Stability and Growth Into Your PortfolioAlternative investments can often avoid the impact of volatility, counterbalancing the ups and downs of stocks and bonds during times of market stress.
-
A Financial Planner's Guide to Unlocking the Power of a 529 Plan529 plans are still the gold standard for saving for college, especially for affluent families, though they are most effective when combined with other financial tools for a comprehensive strategy.
-
An Investment Strategist Takes a Practical Look at Alternative InvestmentsAlternatives can play an important role in a portfolio by offering different exposures and goals, but investors should carefully consider their complexity, costs, taxes and liquidity. Here's an alts primer.
-
Ready to Retire? Your Five-Year Business Exit StrategyIf you're a business owner looking to sell and retire, it can take years to complete the process. Use this five-year timeline to prepare and stay on track.
-
A Financial Planner's Prescription for the Headache of Multiple Retirement AccountsHaving a bunch of retirement accounts can cause unnecessary complications. Consolidation can make it easier to manage your savings and potentially improve investment outcomes.
-
Overpaying for Financial Advice? A Financial Planner's Guide to FeesTake five minutes to review how much you're paying for financial advice. If you're overpaying, you could be better off with an adviser who charges a flat fee.
