Wealthcare for Women: 3 Tips to Go By
Every week, we provide readers like you with actionable advice they can use to improve their financial fortunes.
But it’s important to remember: Different groups of people might think about their money, approach economic issues and handle financial stress in different ways.
This week, we’re dedicating this space to women’s financial well-being—and a prominent wealth management firm executive has dropped in to lend her perspective.
The Tea: A host of recent data points indicate that women are struggling with their financial lives, and that’s having a serious impact on their well-being.
Chief among those: The Ellevest Women’s Financial Health Index, which shows women’s financial health under serious pressure. Amongst the factors driving the angst:
- Low consumer confidence
- The gender pay gap
- The glass ceiling
- New restrictions on reproductive healthcare
- Limited access to paid family leave
- A higher share of student loan debt than their male counterparts
This is leading to high levels of stress. According to the Ellevest Financial Wellness Survey 2022, 59% of women stress about money more than once a week and 43% of women actively worry about money at least once a day—in both instances, they’re out-worrying men (55% and 36%, respectively).
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No wonder, then, that as of December 2022, a third of women over the age of 18 reported symptoms of anxiety disorder, according to Statista.
To help women face these challenges head-on, we’ve talked to Carol Petrov, CFP®, CPWA®, vice president and senior relationship manager of Kendall Capital, a wealth management firm based in Rockville, Maryland.
The Take: Petrov—co-author of the book Middle-Class Millionaire Women: Essential Strategies to Ensure Financial Longevity—has a few tips for women of any age who are feeling stressed and challenged by today’s economic environment.
1. Own Your Strengths
Petrov suggests women lean into their most helpful tendencies to get through difficult times in the stock market.
“When women invest, they tend to be more goals-focused and less concerned about the day-to-day movements,” she says. “We work with career women, mothers, and they frankly have a lot more on their to-do list than worry about the markets.”
But natural inclinations aside, Petrov still says it’s important for women to get basic financial and markets literacy. “Because once you know that [market volatility] is just normal market B.S.,” she says, “you just contribute to your 401(k) because you know you’re ‘buying low’ and go back to whatever it is you’re doing.”
“Women also have historically been the ones who manage the household budgets, deciding what they can and can’t afford,” Petrov says. That puts them more in tune with the day-to-day spending.”
Translation: Women are more able to determine how inflation is hitting the family’s pocketbook—and thus in a prime position to put out fires by shifting their spending habits.
2. Don’t Ignore Your Needs
Women often put the needs of others before themselves, Petrov says. But they don’t always have to—and when they do, they can do it smarter.
“I can’t speak for all women, but mothers know what it’s like to give something up for your kids—maybe your husband (she laughs), but definitely for the kids,” she says. “Every mother can give an example of what they sacrificed, like giving up clothing shopping because they had to pay for braces, or giving up dining out because they had to pay for after-school care. I think it’s in their DNA.”
That said, there are still ways to sacrifice a little while still addressing your mental well-being.
“I think there are a lot of ways to reduce stress, manage time and have a healthy mind and body, that are free,” Petrov says. “If you’re used to going out to eat all the time and that was your way to relax, invite friends over and eat in.” Even this little shift has an additional upside: You’re learning more about cooking, which can help you further stretch your dollars.
You can also improve your mental health by taking care of your long-term needs. Petrov suggests putting more money in your 401(k) so you have less to spend on frivolous expenditures. “You’re making a commitment to yourself,” she says—you’re taking care of your future self.
And sometimes, some sacrifices can actually be counterproductive.
“If you are saving for your kid’s college but not paying off your own loans,” she says, “that could be harmful because the rate of return of your investments is outweighed by the interest you’re paying on loans.”
3. Keep Emotion Out of Your Financial Decisions
One of the most popular pieces of advice for men and women alike is to take emotion out of the equation. But it’s one thing to know it—and another to do it.
So, practically speaking, how do you keep your reactions in check?
Here’s a tip for long-term investors: Don’t check your investments every day. “If you just check quarterly, you’ll [mentally] avoid a lot of the ups and downs, a lot of the noise,” Petrov says. “You’re not going to make good decisions based on knee-jerk reactions.”
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Another way to keep a cool head in a number of financial situations is to save, save, save, and all the benefits trickle downhill from there.
“Having a savings account or CD—you will have a healthy mindset knowing you have enough cash in the bank,” Petrov says. “Having enough cash helps you not stress about the market. It also allows you to not hate your job. And if things at work are really bad, you can quit because you have some cash to live on while you make the transition.”
“And it helps you to not panic if you have an emergency like, say, your car breaking down. ‘What do I do? Well, I have money in the bank and good credit, so I have options.”
The Generational Divide
Let’s close this week’s letter by going back to what we said earlier about how different groups of people have different experiences with money.
One of the biggest differences between men and women is how women’s financial experiences can differ so much based on when they were born.
“Most guys’ situations are very similar based on age, regardless of generation—they’re typically earning and providing,” Petrov says. Not so for women, who have a much wider range of financial experiences depending on their generation.
“Older women might not have worked, always had someone pay the bills, write checks,” she says. “So when they become widows, you have someone who … doesn’t know the basics, and will be panicked unless she gets advice on how to manage those assets.”
This is an extremely pervasive issue within the Silent Generation (the generation before the Baby Boomers), with trillions of dollars shifting from men to women.
But when you shift to the Baby Boomer generation, it’s not so clear-cut.
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“Some women are in their [early] 60s who were stay-at-home moms, or if they worked at all, it was 30 or more years ago,” she says. “They’re similar to their mothers and don’t do much [financial management]. But you can have women of that same age who were working, had kids, still worked, maybe got divorced, have managed money.”
Meanwhile, younger women “are definitely coming out of the gate doing 401(k)s, having multiple jobs, saving and taking care of themselves,” Petrov says.
In other words: If you find yourself in a difficult financial situation and don’t have others around you who share your experience, that doesn’t mean you’re alone—many other women are in the same boat. And if you do need help past arming yourself with a little knowledge, financial advisors are trained to provide personalized advice that takes your own unique life experience into account.
Riley & Kyle
Young & The Invested
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