Money is a major cause of stress for people nationwide— and to make matters worse, it’s still seen as a major taboo to discuss. Women may be lauded for our communication skills, but why aren’t we communicating about money?
To combat what I saw as a major gap in the industry, I started LearnVest.com in 2009. If you cringe at even the idea of a financial plan, I’d remind you of this: not having a plan is a plan—but probably a really bad one.
So why do I think it’s critical to become Financially Fearless?
1. We make numerous financial decisions every day.
Looking at your bills is not something to deal with annually come tax time. If you think about it, we make 6-10 financial decisions every single day. From how you get to work, to what you eat for dinner, to whether you meet up with friends, these micro-decisions may have a financial impact, and these small decisions can add up.
2. We don’t learn about money in school.
Most schools across the country, from the middle school to the graduate school level, don’t teach personal finance. As a result, it’s no wonder that almost half of Americans (42%) grade their personal finance knowledge as a “C, D or F”. Instead of learning the basics in school, most people learn about money from their parents, or perhaps more commonly, by trial and error. I believe it is this lack of education that trickles down to a general feeling of anxiety and stress when it comes to financial decision-making.
3. Many of us are living paycheck to paycheck.
A survey showed that 76% of the country lives paycheck to paycheck. This means that the majority of people are stressed out about how they’re going to pay next month’s bills.
4. Most women control the household finances.
While many people think of the world of finance as a male domain, it turns out that 95% of women control the financial decisions made in their household. This means that women are shaping their family’s financial lives—but, without access to advice, they might not be making the right decisions. It’s clear to me that everyone could benefit from education on this topic, but women in particular are in an even more critical position to get a handle of their finances. Also, we live six years longer than men on average, and thus have an even more urgent need to learn about money.
5. Money is a major factor in our careers.
Women aren’t asking for raises at nearly the same rate as men, and when women step out of the workforce to care for kids or aging parents, they see a nearly 15% drop in earnings after just one year. And while it’s true that today, women are bringing in more money than ever before, we still could benefit from guidance on how to manage these new funds.
6. Our retirements are at risk.
A huge problem facing women is preparedness for retirement. Think of it this way: You work for approximately forty years (ages 25-65) to fund 70+ years of your life (ages 25-95). It’s therefore important to sock away as much as possible during your working years. Plus, because we tend to live longer than men, it means we need to have more money on hand during retirement to fund these extra years. Women also tend to have higher health costs during retirement.
7. We need to make smart decisions.
Generally speaking, the less you have, the more each dollar matters to you. I believe that financial planning is a key strategy in helping your money grow. A complete financial plan covers everything from budgeting to emergency funds to retirement to insurance to investing. It’s about having a safety net in place, so that money can become less of a source of stress.
So, now what?
Money is our lifeline. If you’re sick, you want the best care money can buy. If you’re in love, you’ll want to travel the world to see that person. Money is a critical tool, and everyone deserves the peace of mind that comes with having a solid financial plan. This isn’t about “getting rich.” It’s about enriching our lives and providing the security, stability, and freedom to help you do the things that you love. There’s no better time than now to get started.