There’s no question that American women have come a long way when it comes to earning money. In 1981 a very small percentage of wives, only 15.9 percent, earned more than their husbands. That number rose to 25% by 2000 and was pegged at 31% last year. But given that women now make up a larger percentage of college students, we still have a long way to go. The wage gap contributes to higher levels of stress in women when it comes to their finances. Let’s just take a look at 5 things women are most afraid of when dealing with money or planning for the future.
Losing their jobs or business
A startling 78% of American workers polled in a recent Insight Global survey say that they are worried about their job security. Given the fact that women tend to ask for more time off in order to take care of their relatives, the pandemic made them even more concerned about their job security. The pandemic is over, and there’s nothing that stops us anymore from unleashing our huge potential focused on our career paths or financial plans.
Not being able to handle a financial setback
A recent survey showed that only 26% of American women feel they are “doing well” or “doing great” saving for emergencies. Financial setbacks can hit at any time, and some are more likely to affect women’s security than men’s. Women generally take more time off for maternity leave than their partners take paternity leave. And it is more often a female relative who cuts their employment to care for young, sick, or aging relatives.
For most women, the question is not whether a financial setback is in the future, but when it will hit. The only way to stay out of debt in an emergency is to have a fund of liquid assets to access.
Most financial professionals recommend having at least three months’ worth of living expenses on hand. If you haven’t started saving for emergencies, start now. Even if you start slow if you are consistent the funds will grow over time.
Never getting out of debt
Twenty percent of TODAY.com readers said in a survey a few years ago that their biggest fear was having too much debt, and never being debt-free. It’s no surprise that women incur more personal debt than men. The wage gap and child-related costs that hit women and their careers disproportionately mean that women have less income, and less stable income, to pay their bills.
There are a few suggested methods to pay off debt. Although they require a bit of discipline they guarantee solid results.
Becoming a ‘bag lady’
This isn’t a joke. There actually is a phenomenon known as “bag lady syndrome.” A 2021 Allianz Life study of over 2,213 women showed that even women with incomes of $200,000 or more are afraid of losing all their money and becoming homeless.
For many of these women, this is an irrational fear. Connecting with a professional financial advisor can help women get an objective view of their financial situation. For some, consulting with an advisor will ease their fears of losing everything. For others, it may be a much-needed wake-up call.
Just like it’s better to have your doctor check out that nagging symptom than ignore it, facing your financial reality could be the first step toward more positive results.
Not having enough for retirement
According to a survey in February last year, more than 60% of women said they’re afraid of not having enough money waiting for them when they’re done working. And it’s totally justified — about 50% of women ages 55 to 66 have no personal retirement savings, compared to 47% of men.
The best way to react to this fear is to meet with a financial advisor. While starting while you’re young is best, it is never too late to start saving for retirement. AARP has suggestions for those 50 years of age or older who want to get serious about retirement savings.
Fear can be a healthy emotion in that it alerts us to potential danger in time to protect ourselves and our families. What’s important is to not let your fear of financial matters turn into inaction.
Take my case. As I was finishing college, my father suddenly fell into a coma. I witnessed my mother’s struggle to manage her family’s investments on her own. I ended up moving to NYC with $200, no job, and with a clear ambition to revolutionize finance on Wall Street (I didn’t even know what Wall Street was, to be honest). While working at two Wall Street premier firms I remember asking myself, at each step, in terms of my career, where am I having the most fun and how do I take the hours or days that are the most fun to make them my entire career? I realized I really like investing, so I moved from investment banking and private equity into private banking so I could do just that.
During that time, more and more people suggested to me to take a leap of faith and open my own firm. After the first person made that suggestion I honestly thought it was kind of a crazy thing to suggest. Then, another one of my big clients (who had left a big firm and started his own firm with tremendous success) actually brought it up as well and said, “Why don’t you go off on your own? I’d like you to manage my money.” And he really pushed the idea of me opening up my own firm. It was during a meeting with a third client making the same suggestion that I heard myself saying to him “Yes, I’m going to do it”. After he offered to invest in this idea I told him I didn’t want his money but to have him as a client after I open my own firm. I walked out of that Starbucks on Park Avenue and 45th Street knowing that I was going to finally do it. And they were right! I ended up taking that leap of faith and created LexION Capital, which is one of the few women-owned and women-run wealth management firms in the nation. And guess what? I hit my year goals within the first day of launch.
