Small Step Financial Planning Strategies for Women

November 2022

Barbara O’Neill, Ph.D., CFP®, AFC®
Distinguished Professor and Extension Financial Management Specialist Emeritus
Rutgers Cooperative Extension

No matter how much women prefer to lean, to be protected and supported, nor how much men prefer to have them do so, they must make the voyage of life alone, and for safety in an emergency they must know something of the laws of navigation.

Elizabeth Cady Stanton, 1892

These words were uttered by one of America's most prominent women's rights leaders 130 years ago. Yet they are as appropriate in 2022 as they were during the late 19th century. For a variety of reasons, some women have had little or no experience making financial and/or investment decisions.

Lack of financial savvy can put women (and men) at a substantial disadvantage. Statistics tell us it is only a matter of time before most women will be on their own financially. Some will never marry, some will see their marriages end in divorce, and many will outlive their husbands. Women also face the following challenges:

1. They earn less, on average, than men do
2. They may have gaps in their employment history, due to child rearing and/or care of elderly parents, that impact future earnings and retirement benefits
3. They are impacted more severely than most men are by life events such as widowhood and divorce
4. Some women rely on a spouse for income and are at risk for becoming a "displaced homemaker" if the relationship ends (e.g., by death and divorce)
5. Some women lack financial experience because they were taught "the man is supposed to handle the money"

What to do? Rutgers Cooperative Extension has a free 270-page workbook, Money Talk: A Financial Guide For Women, designed to teach basic financial topics with an emphasis on women's unique financial needs. Book chapters are available as downloadable PDF documents or the entire book can be downloaded in one PDF file. The book includes dozens of worksheets for readers to personalize the content to their own financial needs.

Below are five of 100+ suggested action steps from the Money Talk book, one from each section:

1. Set Financial Goals- Make a list of short-, medium-, and long-term goals with a date and a dollar cost (PDF) for each.
2. Check Your Insurance- Review existing policies to identify weaknesses (e.g., low liability limits) and gaps.
3. Identify Your Risk Tolerance- Use this online assessment to determine your investment risk comfort level.
4. Organize Investment Records- Start a file folder (paper or online) for account statements (e.g., purchases).
5. Review Your Estate- Check that property titles and beneficiaries do not conflict with terms of your will.

Remember that simply reading printed material, hearing a podcast, or attending a seminar or webinar will not change anyone's financial situation. You need to take follow-up action (e.g., starting an IRA to save for retirement) to achieve your financial goals.

A more contemporary twist on Ms. Stanton's quote, for both women and men, is "If it is to be, it is up to me." Today is the first day of the rest of your financial life. Make the most of it.