Women continue to shine in all aspects of business and exceed all expectations in entrepreneurship, yet they can struggle when it comes to personal finance.
In a report published by the Canadian Financial Post, writer Rosalind Stefanak referred to a recent analysis of retirement account balances conducted by Mercer Asset Management, which showed that women retire with 30% less account balances than men. As a result, they work two years longer. In addition, a 2021 Bank of Montreal survey indicated that women's estimates of how much money they'll need in retirement are 18% lower than men's.
The following are tips from a number of experts that will help women find their footing in the world of personal finance.
Budgeting
Growing up with her father who started his own brokerage firm 30 years ago, Nicole Simmons saw firsthand the benefits of good money management. Nicole has always wanted a job where she could help others achieve financial success, especially black women.
She is now a partner at CPN Financial Services in Brampton, Ontario, whose clientele is 90% female.
Simmons mentioned that budgeting is associated with negative things such as limiting expenses. Many people think that setting a budget means giving up the things you love, but in reality a budget is just a spending plan that helps set priorities. Making mistakes and failing to budget effectively makes some women automatically believe that they will never make it, but not letting go of past mistakes and not being open to change will not help them move forward when it comes to budgeting and thus continue following the same habits.
It doesn't matter how much money you earn, as long as you don't know what you're spending it on, Simmons said. She believes that the main common denominator among women is the lack of careful reading of their account statements to know what they spend their money on most. In contrast, budgeting and tracking expenses helps ensure that your expenses match the lifestyle you want. Simmons also recommends setting up an automatic savings account to make sure you save some money each month.
It should be noted that your budget can be changed as needed to suit the different stages of your life. And your plans should be realistic about what you can afford based on your income, so you don't get discouraged.
Invest with Confidence
Julia Chang, Co-Founder and CEO of Surrey-based Spring Planning, is constantly getting emails from women in their 20s and 30s who are eager to learn more. On investment and financial planning.
Chang says that women in North America are less inclined to invest than women in Asian countries, for example. She believes that this behavior stems from a negative view of mathematics and numbers, to which is added the degree of complexity of the investment process. It must be recognized that women's feelings of inferiority do not stem from within themselves, but from the influences of society.
Chang emphasized that women do not need to understand how to calculate bond yields or how to trade to be a good investor. In the beginning, I advised defining what you want to achieve and then how much money you need to save to achieve these goals. She stresses that men and women alike need to learn some investment basics and to be supported and consulted by professionals.
It's okay to be careful when investing if you plan ahead, Zhang said. You should also think about the cash flows you need at different stages of your life. Do not hesitate to consult a specialist whenever you need to.
Prepare for better or worse
Elke Robach was 15 years old when her father died, leaving her family without insurance or any financial plan. A former attorney, she founded Rubach Wealth in Toronto in 2012, whose primary mission is to educate women (who make up 70% of her clients) about the importance of being financially literate so they don't make ill-considered decisions or rely on their partners in making such decisions.
While women have broken all barriers and expectations in the corporate world, Robach notes that they are not as focused on finances as they are in personal relationships. There are women who are considering divorce but fear not being able to afford the costs of leaving the marital nest, even though they earn between $300,000 and $500,000 annually. They may suffer from living with spouses who drain them financially, as they have no control over their finances.
Robach stressed the importance of a woman making sure that her husband understands the importance of sharing responsibility for expenses. And if you can't talk to your husband about these things openly at the beginning of the relationship, you're likely to face bigger problems in the future.
On the other hand, when a marital relationship ends, Robach finds it necessary to reach a reasonable settlement and think through all the details, especially if you have children. And do not forget to follow up on the debts on the joint accounts between you and agree to share these burdens. It's also a good idea to keep extra money in your emergency fund to prepare yourself for not getting alimony or child support payments. Robach also recommends setting goals that enable you to achieve financial independence regardless of your marital status or wealth.
Planning for Retirement and Beyond
Laurie Campbell has more than 30 years of experience helping people manage their finances. As a dedicated client finance manager at Bromwich + Smith Inc, she currently works with a team of certified bankruptcy and debt relief experts, always eager to help women better prepare for retirement.
Many have watched their mothers struggle to save money or leave financial planning to their husbands, Campbell said. In fact, women do not think about saving money at an early age, and they do not realize that the more solid financial plan they put in place at an early age, the more valuable money they will accumulate for retirement. In addition, women still earn much less money than men, so it is not surprising that they have to work for many more years before considering retirement. Maternity leave and the time a woman spends raising children also affects the amount of wealth she accumulates over the years.
5 to 10 years before retirement, Campbell advises avoiding investment risks that could affect your well-being during retirement. It is important to have a solid plan in place before you stop working out. And if your company allows it, try a gradual retirement plan that enables you to work a few days a week for a few years, especially since many companies want to retain expertise in certain skills.
Advice on estate planning: A woman should discuss with her husband the consequences of the death of one of them and the remarriage of the other. And the spouses must develop alternative plans that will provide welfare for those in their sponsorship after death.