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
-
I missed the 2-Year IRMAA Rule. Now, my Medicare costs are skyrocketing. What are my options?A spike in income could result in costly IRMAA charges on your Medicare premiums. We ask financial planning experts for advice.
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
How to Build Your Financial Legacy Three Piggy Banks at a Time
A wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's GuideFor Americans in lower- and middle-income tax brackets, the enhanced deduction for older people reduces taxable income, shielding most of their Social Security benefits from being taxed.
-
Financial Planner vs Investment Manager: Who's the Better Value for You?When markets are shaky, who do you trust with your money? A recent study provides useful insights into the value that different financial professionals offer.
-
I'm a Financial Adviser: This Is How You Could Be Leaving Six Figures in Social Security on the TableClaiming Social Security is about more than filing paperwork and expecting a check. When you do it and how you do it have huge financial implications that last the rest of your life.
-
The Big Pause: Why Are So Many Americans Afraid to Retire?While new research sheds light on Americans' growing reluctance to quit work in later life, can anything be done to help those with the retirement jitters?
