International Women’s Day takes place this year on March 8, 2017. It’s origins go back to New York City, when in 1908 roughly 15,000 women marched for better pay and working conditions, and the right to vote. The next year, the first National Women’s Day was observed in the United States. Countries around the world will use the day to celebrate the achievements of women with conferences, special workshops, networking events, rallies, and entertainment. The focus will continue to be on the gaps that persist, while recognizing and honoring the accomplishments.
A Reason to Celebrate
There is much to celebrate. There are more women executives today than ever before. According to Money Magazine, in 2016 women controlled $39.6 trillion, or approximately 30% of the world’s wealth. Women are responsible for between 80% – 90% of all purchasing decisions. Women are entrepreneurs, leaders in government, and at the helm of social justice initiatives throughout the world.
Yet, much work remains to be done, particularly in the area of women’s personal financial health and their ability to achieve financial freedom. Consider the following challenges women face:
- While gains have been made in reducing the earnings gap, women still typically earn only 80% of what their male counterparts earn.
- Women tend to be significantly underinvested in their retirement savings account. This is particularly problematic since women live longer and often outlive their spouses. According to the National Center for Health Statistics, a woman 65 years of age can comfortably expect to live another 20.5 years, 2.5 years more than a 65 year-old man. Women need a much bigger nest egg to carry them through their retirement years.
- Women temporarily leave the workforce for a number of reasons such as rearing children or taking care of elderly parents, resulting in a number of years when there is no income, nor investment in an employee-sponsored retirement account or IRA, seriously eroding her financial health especially during retirement years.
- Women’s credit is less healthy then men. Because men earn more, their debt-to-income ratio is better and they are thereby in a better position to obtain new credit accounts at lower interest rates.
- Women still do not think big. Years of data collected by The DailyWorth indicates that women remain focused on short-term financial goals, such as managing the household budget, paying monthly bills, and shopping for the home. They lack the financial literacy skills to manage long-term investments, leaving important decisions that impact their financial health in the hands of others.
So What can be Done?
- Financial Literacy. Make it a priority to become financially literate and a powerful advocate for your own financial health. Tap into the wealth of expertise that is out there, whether it be to learn with a financial advisor, attend seminars, take online classes or join women’s financial and investing groups. Do everything you can to become educated in the world of finance, especially on the topics of money management, savings and investments. In this way, you will be in a position to make the best decisions for your financial future.
- Improve Your Credit Score. Take advantage of opportunities to open credit accounts in your own name, for modest purchases and be sure to pay all bills on time and in full. Keep your revolving credit debt below 30% of the total amount of your overall credit limit. The best is to stay around 10%. Monitor your credit reports to ensure there are no errors.
- Invest more aggressively. Studies indicate that women tend to invest very modestly, whereas men are more aggressive. Better to employ some combination of both, to capture the fullest potential of growth in your investment portfolio. Utilize investment advisors and money fund managers and do not hesitate to be assertive in articulating your long-term financial goals. Think big.
- Delay Retirement. Along with living longer comes the opportunity to remain in the workforce longer. Even an additional two years will add money to your social security benefits, to your retirement accounts, and to your long-term savings programs. The longer you can delay tapping into social security, the greater will be your benefits.
This International Women’s Day make a commitment to yourself. Take ownership of your financial life.