Financial planning: A guide for women
Money considerations for women often look different than they do for men. While women sometimes face distinct hurdles, they also have unique opportunities and strengths—especially when it comes to investing and saving for the future.
Here are five strategies for women to consider when setting financial goals and managing their money.
1. Build up a financial cushion.
It's always a good idea to prioritize saving, whether you're setting money aside for a dream vacation or building an emergency fund.
A 2023 analysis of Federal Reserve data by the Center for American Progress found that women are less likely than men to have three months of emergency savings. If you haven’t started your savings account, now is the time to begin.
Whether you put aside a few dollars a paycheck or several hundred dollars a month, any amount you can contribute today will help build your reserves for later. Consider opening a high-yield savings account to earn higher interest on your money and grow your cushion.
2. Get into investing.
For some people, wading into the stock market can seem intimidating: Only one-third of women in a 2021 study said they see themselves as investors. But the same study also found that woman investors outperform their male counterparts by 40 basis points.
If you’re ready to grow your wealth, begin learning the basics about investing; you don’t need to be a financial guru to get started. You also don't need to put a lot of money on the line. Dip a toe into the waters by investing a small amount into a diversified index fund or ETF.
3. Negotiate with confidence.
Even in 2022, women only earned around 82% of what men earned, according to the Pew Research Center. While you can’t dismantle the root causes of the pay gap, you can use this knowledge to bolster your case when negotiating a salary.
If you’re interviewing for a job or up for a promotion, do some research to learn what others are earning—both men and women—in similar roles. Look up salary data from the U.S. Bureau of Labor Statistics or state and local databases. If you're comfortable with it, start conversations about salaries with friends and colleagues who work in similar roles and industries. Advocate for yourself and understand your worth when you sit down at the negotiating table.
4. Check in on your retirement fund.
Even if retirement is decades away, it’s never too early for a savings check-up—especially for women, who have a longer average lifespan than men. The gender pay gap can also have a domino effect on your retirement savings, leading to less money set aside over time.
Review your current savings with a trusted financial professional or use online calculators to project your nest egg’s growth. Make sure you’re taking advantage of all your options to save for retirement, including employer-sponsored 401(k)s and a personal IRA.
5. Caregivers: Take care of your own finances.
Caring for loved ones can impact your finances, and 44% of women said they were caregivers in an October 2023 study. Some caregivers forego not only income but also access to health insurance and retirement savings.
If you’re taking care of someone else’s financial wellbeing, don’t lose sight of your own. Work with a financial professional to ensure you’re still able to meet your financial obligations and set aside money for retirement and a rainy-day fund.
