In today’s society, where economic disparities are still apparent, bridging the wealth gap has become a societal issue. While several factors contribute to wealth inequality, one prominent aspect is the gender wealth gap. Women have traditionally been subject to disadvantages, earning less than men and owning fewer assets. However, with increasing consciousness about gender equality and financial independence, more women can build financial security.
How women can build confidence
Implementing several strategies can help women work toward financial independence and wealth creation, bridging the wealth gap.
Financial literacy
The first and foremost step towards pursuing financial security is through financial literacy. Women must educate themselves on budgeting, investing, retirement planning, and other aspects of personal finance. This awareness may help women manage their finances better and make informed decisions about their money.
Investing
Investing is a powerful tool for wealth creation. However, due to societal and psychological factors, women have traditionally been risk-averse and thus less likely to invest than men. With financial education and working with financial and tax professionals, women can overcome these hurdles and make investing a regular part of their financial lives.
Various investment options are available, from stocks and bonds to real estate and mutual funds, each with risks and rewards. Women who understand investment strategies and terminology are likelier to invest in their goals.
Saving
Another building block for confidence is saving. Women should aim to save a portion of their income regularly into different vehicles:
Emergency savings- An emergency savings fund is crucial for unforeseen expenses, such as sudden job loss or unexpected medical bills.
Retirement savings- Saving for goals such as retirement and others can help contribute to long-term wealth accumulation. Women must contribute to employer-sponsored retirement savings plans and invest outside of work through various investment strategies that are appropriate for their situation:
- Roth IRA
- Mutual Funds
- Stocks
- Bonds
- Real-estate
Increasing income
Increasing income is another key strategy for bridging the wealth gap. Women must consistently strive for professional growth, negotiate for better salaries, and seek other employment to supplement their income or replace their current roles.
They should also consider diversifying their income streams. Having multiple sources of income may help provide added confidence and increase overall wealth.
Purchasing insurance
Women purchase insurance primarily to protect themselves from unforeseen circumstances and financial hardship. Insurance can provide critical support during medical emergencies, accidents, property loss, and income loss.
Women must work with insurance and financial professionals to determine any gaps in coverage to help circumvent financial loss. These professionals will assess coverage in some of the following areas:
- Life insurance
- Property and casualty insurance
- Health insurance
- Long-term care
- Disability coverage
- Annuities
Engaging in estate planning
Estate planning is crucial. Women must consider wills, trusts, powers of attorney, and health care and financial directives to help ensure their assets are distributed according to their wishes after their demise. Estate planning can help women work toward preserving their wealth and providing for their loved ones after their death.
Pay equality is everyone’s responsibility.
While these steps can help women build wealth and confidence over time, societal change is crucial in bridging the gender wealth gap. Employers must commit to pay equity and equal opportunities for women. Furthermore, reforms in policies related to maternity leave, childcare, and elder care are needed to ease the financial burden on women.
Financial security for women is not elusive; it is possible through financial education, working with financial and insurance professionals, evaluating, planning, and working toward a more balanced and inclusive society.
SWG4220481-0225 a This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed.
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