Steps towards financial empowerment
Asked about their biggest financial regret, a sizable portion of women participating in a recent study1 said they didn’t invest enough. The women also reported that they wished they’d chosen a career with higher pay, not taken on as much credit card debt and lived within or below their means. While these issues may be common among many women, the great news is that financial regrets, like mistakes, are correctable if not avoidable. For women, this means growing your financial knowledge base and sense of confidence to tackle your goals over the long term. Indeed, focusing on longevity – and the requisite long-term financial and wealth planning – is particularly important now that women are living much longer. In Canada, for instance, women on average live four years longer than men.2
Significantly, there is a clear trend towards financial empowerment for women in Canada. An increasing number of women are creating wealth (due to greater workforce participation as they become the leading holders of post-secondary degrees) or inheriting wealth (as they come into money from parents and/or spouses). In fact, by 2024 the privately held wealth of Canadian women is estimated to rise from $1.2 trillion to $2.7 trillion, representing 50 per cent of total private wealth in this country.
And while every woman has unique life circumstances and a different approach to money matters, there are also some common elements. For many women, money is an emotional subject closely tied to safety, security and independence. Add to this the fact that many women are currently swept up in caring for elderly parents while at the prime of their careers, managing the household and raising teenagers. This can create feelings of anxiety, loss of time and control in the “sandwich” generation of women.
“Women see money as a means to an end. And as such, they want to connect money and investing to their lives,” says Sarah Widmeyer, Richardson Wealth’s Director of Wealth Strategies. “Don’t simply tell me about the biggest pile of money I can accumulate, explain my money in terms of what it can do for me – if something happens, can I still stay in my house? Can I afford to send my kids to the universities of their choice or take in my aging mother to live with me?” Widmeyer says.
“There’s a big difference in how men and women consider themselves to be doing well financially. Men are more likely to be satisfied with seeing a healthy return on their investment portfolio, if not competitively wired to seeing how their portfolio return ranks against others, whereas women want assurance that they are on track to meet their financial goals and will have enough accumulated to last them through their declining years.”
Guidelines for each stage
Just as there are specific tasks and features associated with age-related physical health checks, here are some guidelines for each life stage to help you navigate your financial journey.
In your 20s
Milestones may include the following: Newly graduated; Entering the workforce as a permanent employee or contractor; Starting your own business or venture; Early career development.
What to consider
At this early stage of your adult life, think strategically and set goals in terms of your career and life direction. And as you focus on climbing the career ladder, build solid financial habits. Here are some of the key habits that can benefit you over the long term: For starters, become a diligent saver (the amount will depend on your income among other things); pay off student loans; and don’t overspend on entertainment and social activities.
In your 30s and 40s
Milestones may include the following: Buying a house; Getting married/establishing a common-law partnership; divorce; Setting up a business or venture; Starting a family; Approaching mid-career;
What to consider
Ultimately, let your priorities guide your plan. In addition to continuing the core financial good habits from your 20s, you may need to add new options and/or review existing arrangements for this stage of life.
In your 50s and 60s
Milestones may include the following: In most cases, this is the final career stage; retirement planning; downsizing.
What to consider
Professional life isn’t – or shouldn’t necessarily – be over for a mature woman. With your years of experience, there is no need to curtail your career ambitions if you’re so inclined. This can mean continued opportunity for saving and investment until retirement.
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1 A U.S. study by Merrill Lynch in partnership with Age Wave, March 2018.
2 In Canada, average life expectancy for males born in 2012 is 80 and for females 84, according to a report by the World Health Organization. (World Health Statistics 2014 Report).
