Take Charge of Your Financial Future

Women, investing, and why financial freedom is necessary

A young journalist approached me recently and said quite passionately, “We have to make women aware that they have to take charge of their money. They cannot depend on someone else to do that for them!”

After talking with her more I discovered where her passion was coming from. It turns out her 54-year-old mother recently divorced. She was left with basically nothing and had now moved in with her daughter. Her daughter was now supporting herself and her mother.

This situation alone was a wake-up call for the young journalist, and it shook her up. In looking ahead, she then realized that if her steady paycheck stopped, she had a total of about $7,000 to fall back on. She was suddenly propelled into action.

The need for women to invest

Women must become proficient investors. The statistics about women and money are very startling. The following are U.S. statistics, yet I find that for other countries throughout the world these statistics are either very similar or are trending in the same direction.

In the U.S.:

  • 47% of women over the age of 50 are single. (This means they are financially responsible for themselves).
  • Women’s retirement income is less than that of men because a woman is away from the work force an average of 14.7 years as compared to 1.6 years for men. (Women are typically the primary caretakers of the home). This, along with lower salaries, adds up to retirement benefits that are only about 1/4 of those of men (National Center for Women and Retirement Research – NCWRR).
  • 50% of marriages end in divorce. And who typically ends up with the children? The woman. So now she is solely financially responsible for herself – and her children. And what is the #1 subject couples fight about? Money.
  • In the first year after a divorce a woman’s standard of living drops an average of 73%.
  • As of 2000, women are expected to live an average of 7 to 10 years longer than men, (Ann Letteeresee June 12, 2000), which means they must provide for those extra years. However, married baby boomer women can expect to outlive their husbands by 15 to 20 years on average.
  • The average female born between 1948 and 1964 may likely remain in the workforce until at least 74 years of age due to inadequate financial savings and pension coverage (National Center for Women and Retirement Research, 1996).
  • Of the elderly living in poverty: 3 out of 4 are women (Morningstar Fund Investor), 80% of the women were not poor when their husbands were alive, and approximately 7 out of 10 women will at some time live in poverty.

No more fairytales

What are these statistics telling us? They tell us that more and more women, especially as they become older, are not educated or prepared to take care of themselves financially. We’ve spent our entire lives taking care of our families but have no ability to care for ourselves in this vital way. We are either depending upon someone else to do it for us – a husband or partner, a boss, a family member, or the government. Or we just figure that it will all work out. The fairy tales we grew up with were just that.

Three final statistics to consider:

  • 90% of all women will have sole responsibility for their finances within their lifetimes…yet 79% of all women have not planned for this.
  • 58% of female baby boomers have less than $10,000 in retirement.
  • It’s estimated that only 20% of baby boomer women will be financially secure in their retirement (Ms. Magazine, 2002). This means that 80% of us will not be.

It’s time for women to stop living in the fairytale that they will be taken care of by others their whole life. The statistics simply prove that is not true. It’s time for women to rise up and learn how to take care of themselves financially (and otherwise).

This takes financial education, understanding how money works. Today, I encourage you to take these statistics not as a fact for your future or your present, but as a challenge to take charge of your financial well being today. Take a class, attend a seminar, read books on investing and business, and find a mentor to help you become financially free. At the end of the day, you must take responsibility for you and your finances, not rely on someone else. It will be the best decision you’ve ever made.

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