Lisa was consulted by GoBankingRates to offer her advice to women struggling with the most common sources of financial stress. What are they, and what are some of the best ways to overcome them?
An article published by GoBankingRates recently went over a survey of more than 1,000 women to find the four most common stressors when it comes to women and their finances. Our own Lisa Jones, who specializes in financial planning for women, was consulted for the piece, offering some insight and expertise on how to tackle those pain points with confidence.
The first source of pressure covered by the article was inflation and the possibility of not being able to cover average, everyday expenses. While it may sound simple, the survey found it to be the top stressor for 39% of the survey’s participants, as this extremely broad fear appeared to trickle down into other aspects of their financial health. Lisa said that she has unfortunately noticed a trend of women reducing their savings to keep up with inflation and the rising cost of living. This has impacted their 401(k) contributions and their expected retirement date, as they’ve prioritized supporting themselves and other family members. She did, however, offer a solution for those worried about the long-term future.
“Women should focus their spending on the basic necessities of their household and in turn, change their shopping and spending habits on the non-essentials,” Lisa said. “Don’t lose focus on saving for the long term while still meeting the current short-term needs of the household.”
The second greatest stressor, as named by 18% of the women in the survey, was not having the money to cover an unexpected emergency expense. Lisa believes the most effective way to prepare for surprise expenses is to build an emergency fund, allowing you to access a designated fund in the event that you need the money to support your everyday life. Furthermore, you can build a spending and budgeting plan that helps you allocate your funds, whether you’re in a period of comfort or turmoil.
“Creating a spending plan for yourself is a key element of financial well-being,” she said. “We all spend money, but true financial wellness comes when we create a plan to do so. We have found that the large majority of households that are managed by a single female don’t have enough savings to continue their households for more than one month when a job is lost. This leaves many women’s households open to catastrophic financial risk. But the good news is, with a few small changes, this does not have to be your story.”
Next, 15% of women in the survey revealed that their greatest financial fear is not having adequate funds to retire. Lisa works with retirees and pre-retirees on a daily basis, so she understands that retirement is at the forefront of so many investors’ minds. She also knows what it takes to reach a comfortable and safe retirement. Lisa had three tips for those worried about their retirement savings: Prioritize yourself, push yourself to save more, and put your money to work.
“Many times, women enter retirement with a smaller nest egg than men,” she said. “They are typically out of the workforce longer acting as a caregiver for children, grandchildren or aging parents. Women are also saving for retirement on a smaller income. Each of these factors emphasizes that women must create clear goals for retirement.”
Finally, 8% of women said their biggest stressor was potential job loss or layoff, which makes plenty of sense as major companies continue to let employees go. Nevertheless, building a sufficient emergency fund can shield you from the dangers that come with losing your job and offer a buffer should you need it. Additionally, it can be helpful to pick up an extra job or a part-time job as a safety net.
“Women should consider the possibility of consulting work or part-time employment to keep their job skills sharp,” Lisa said. “Continuing to network with others in a particular career field or industry will provide a network of colleagues to reach out to if a job loss occurs.”
All of these concerns are valid, but at PCIA, we believe you can mitigate the risk of danger with proper planning.