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Women are a large part of the workforce. They are often times directly involved in their households’ investment and financial decisions. Even if this is something you might not be involved in currently, in the unfortunate event that your partner is incapacitated, these financial decisions may fall into your lap. In fact, a Prudential research study states that 95% of women will be their family’s primary financial decision maker at some point in their lives.
The coronavirus pandemic, however, had an alarming impact on women globally. Over the last few years, women were disproportionately affected by job loss and burnout as they juggled work with caregiving demands.
In 2020 alone, women globally lost more than 64 million jobs. This equates to 5% of the total jobs held by women (Oxfam International). By comparison, 3.9% of men’s jobs were lost last year. This loss of jobs due to the Covid-19 crisis, cost women around the world at least $800 billion in earnings, a figure that is more than the combined GDP of 98 countries.
Women desire to make informed and beneficial choices for themselves, their families, and their communities. The ongoing pandemic and geopolitical tensions have heightened women’s recognition of the need to create a roadmap for making good decisions about the opportunities and challenges to their financial freedom.
Following are a few helpful steps you can take to prepare for your financial future:
First, know your financial situation.
Make a list of your assets and liabilities. Take an honest look at your income and your expenses. Are your assets titled correctly? Who will receive your assets? Are your current beneficiary designations appropriate? At a minimum, have a plan for retirement, update current beneficiary designations and select the appropriate individuals to serve as financial and health care powers of attorney.
Second, examine your credit history and insurance coverage.
Do you have credit in your own name, or jointly? What are your credit limits and what do you owe? How do you prepare for the worst case scenario? Review your insurance coverage and work with a professional to ensure you have the appropriate coverage with financially sound companies.
Define and establish your financial goals.
What are your priorities, responsibilities and dreams? These will be unique to you. Identifying whether you want to plan for an emergency, retire early or leave something to charity can be very motivating and help you commit to your financial plan.
Finally, establish a comprehensive plan with someone you trust.
Have you ever met with an advisor and felt like that person didn’t hear what you were saying or dismissed some of your concerns? Studies show women relate with and communicate differently than men, sometimes by telling stories or preferring to collaborate when working with others, even with professional advisors.
Women should choose an advisor that they feel comfortable with and one that creates an inclusive environment. Collaboration on an interpersonal level, as well as being a good listener, are important traits when searching for an advisor to help you manage your funds and plan for the future.