National Center for Women and Retirement Research

A study conducted by NCWRR or National Center for Women and Retirement Research indicated a direct relationship between the financial habits of women and their personality characteristics. An optimistic outlook, their openness to adapt to a change, and assertiveness are the qualities which tend to lead to sensible and smart money choices. Suze Orman is a TV host, author, and a Financial Planner who believes that our issues with money are nothing but manifestations of issues in our relationships and life. Working on money issues and other issues will prove to be beneficial. It means that sometimes, resolving our life-issues can help us in sorting out money issues.

For a lot of individuals, money is actually an emotionally charged problem. Control, love, or even power might be represented by it. Our own concepts about money and our attachments to money can influence the way how we handle and spend money. It is not easy to manage money while handling other priorities. Women of all backgrounds and ages seem to struggle with the burden and pressure to earn sufficiently, plan retirement, care for their family, and even access education.

Taking the opportunity of educating themselves about complicated and time-consuming financial decisions will help women in achieving their next milestone. Each and every informed decision taken by them will get them closer to it.

It would be surprising to realize that women are three times likely to say that they cannot afford to save for retirement and also have lower rates in terms of financial literacy in comparison with men. The majority of caregivers is also made by them and they are three times more likely to quit working for taking care of their families. Generally, less is saved and earned by women and they also seem to live longer. However, they are still accountable for the same expenses of living paid by men. And considering the fact that they live longer, additional costs are faced by them along with expenses of healthcare. Serious dedication and time investment is required for overcoming these hurdles.

Learning how to raise earning and making the use of resources to their fullest can assist women in making most of the available paychecks and approach different financial choices with confidence. Low rates of literacy influence the lives of females drastically and it demands them to work harder. It also requires them to invest more time in paying debts and sometimes even settling for earning less.

Apart from the Canadian context, the US Education Department seems to report that approximately 3.8 million women have literacy skills lower than the basic or fundamental level. And the basic level refers to primary math skills, writing, and reading. This insufficient education makes it quite tough to understand financial documents, agreements of credit card, and bank statements. When women lack competency in financial literacy, serious repercussions are faced by them like experiencing hurdles in managing investments, taxes, incomes, and taking on large sums of debt on credit card.

At present, women have a higher possibility of completing graduate school and completing college than men. However, graduation doesn’t seem to guarantee proper and strong financial stability. Many graduates are followed by student loans into their careers, and serious obstacles are faced by women when it comes to the repayment of debt.

As post-college earnings are dedicated to loan payments by women, they are actually drawing from their paychecks which are significantly smaller than the income of a man. Paying large sums of loans from their bound and limited resources seems to leave less money to save for other priorities in terms of finance, like creating savings of retirement or purchasing a home. The vice president for employment and education at the Law Center of National Women, Fatima Goss Graves recommends female to pursue options of a career with high potentials of earning. She exclaims that women in math, engineering, technology, science, and finance fields are not sufficient enough.

Taking part in the workforce has some distinct implications for females. Life interruptions and an unfair gap in wage can slow the progress of career and force some females to face obstacles in covering basic expenses of living. When breaks are taken by women from their jobs for childbirth or taking care of their payments, they put their momentum on the stake which they have achieved from working in the field. In the US, 46.9 percent of the overall labor force is made by women, even though this number is predicted to decrease in the upcoming years.

Although more single females are becoming homeowners, it is still not easy to carry the burden of paying the mortgage. Single women, in the 1990s, started outpacing single men in terms of homeownership. Men were outnumbered by them in the categories of home buyers, owning a home, living alone, repeat home buyers, and even in spending half of their incomes on housing, in accordance with the National Association of Realtors. Actually, if you are spending fifteen to thirty years paying a mortgage with high-interest, putting the case aside for retirement savings and emergencies can be quite difficult.

Women are paying higher rates of interest on mortgages in comparison with men – 0.4 percent on average, in accordance with a research conducted by the Journal of Real Estate Economics and Finance in 2011. Almost half of the marriages seem to end in divorce in most of the cases, financial consequences are encountered by women with higher severity levels than men. Complications, tax liabilities, and legal fees from dividing assets make a divorce costly, and several years can be taken by it before a financial recovery is made possible. Divorce is not like other financial matters because it is tough to plan for it. Household tension and emotional stress follow financial burden and months can be taken by the legal process to resolve. The custody of children are retained by most of the women and they struggle in making ends meet due to the costly nature of childcare. It can be said that some women even without kids find themselves facing difficulties in adapting to a lower living stand which follows divorce.

Today, a male reaching 65 will live to 84.3 on average in comparison with the 86.6-year lifespan of a female, in accordance with the Society Security Administration. As women live longer, the savings required for retirement seem to grow. Single women ranging from widowed, divorced, to unmarried, are not prepared for retirement. Married and single women seem to focus more on priorities unrelated to their retirement, such as paying for the needs of children and even purchasing a house.

A negative consequence of not prioritizing money saving is concerned with missing out on opportunities which can aid in leveraging time to your benefit. A sum of money which is kept in an interest-bearing account can expand into a large and valuable asset. Accounts offered by employers can involve match plans and tax advantages. Benefits of social security can also be limited by the earning-wage gap. As a consequence of these obstacles, lack of planning and fewer resources, it is highly possible for women to live in poverty when they are old and might even be forced to depend on governmental programs for covering their expenses.

It is undoubtedly crucial for both men and women to have awareness about finance. Money management should be understood by all adults.

On average, men still are the ones to really handle the financial planning for long-term including insurance, management, retirement, investments, and savings. A survey of wealthy divorcees, widows, and women determined that although 85 percent of women exclaimed they managed daily expenses, 23 percent said they were capable of taking the lead on financial planning for long-term. These components for long-term are critical areas which ensure we are ready for retirement, protected for all types of disasters and are enhancing our money. And those who do not manage their finances with their wives or spouses are not getting the important knowledge and experience for ensuring they can be independent in terms of finance. Moreover, the reason why females are less involved seemed to range from discouragement from their partner to a belief that their spouse had more information about the topic. Thus, not only females have less experience in finance management, unique challenges are also faced which add the necessity of financial independence and knowledge.