Women and Money: 5 Common Financial Fears

Tips to Mitigate These Common Fears and Gain Financial Confidence

Kathy Longo, CFP®, CAP®, CDFA® Monday, 14 August 2023

Women and Money: 5 Common Financial Fears

In a world where women are progressively breaking barriers and rising to leadership positions, there remains a lesser-known yet significant aspect of their journeys: financial fears that often hinder their progress. The fact is that women continue to face unique challenges when it comes to financial well-being. From unequal pay to a lack of financial literacy, a lack of confidence and common financial fears can have long-term consequences on a woman’s economic independence and overall life satisfaction. In this article, I’m sharing five common financial fears for women, as well as actionable strategies to empower you to overcome these obstacles and embrace a future of financial security and empowerment.

Fear #1. The Gender Pay Gap

One of the most significant financial fears women face – and one founded completely in reality – is the persistent gender pay gap. Despite efforts to bridge the gap, women, on average, continue to earn less than their male counterparts in many industries and professions. This income disparity can have a long-term impact on women's financial stability, retirement savings, and overall wealth accumulation.

To overcome this fear, be sure that you’re advocating for yourself in the workplace. It’s not always easy to do, but you are your own best advocate. Negotiating fair salaries for yourself, seeking promotions, and actively pursuing career development opportunities can help bridge the gap. Additionally, supporting policies that promote pay equity can create a more inclusive and equal work environment for everyone.

Fear #2. Lack of Financial Literacy and Confidence

Another of the most common financial fears for women is a lack of financial literacy and confidence in managing money. Due to historical and cultural factors, women have often been excluded from financial conversations, which can lead to a lack of knowledge and comfort with financial matters. It doesn’t help that many people today still feel the topic of money is taboo, so we simply don’t spend enough time talking about it with family members and friends, which can be one of the best ways to learn.

To mitigate this fear, it's essential to invest in your own financial education. Seek out resources, workshops, and courses that can enhance your understanding of personal finance, budgeting, investing, and retirement planning. (My podcast, Flourish Financially with Kathy Longo, is a great place to start!) Building financial confidence will empower you to make more informed decisions and take control of your financial future.

SEE ALSO:  Four Financial Planning Tips for Women

Fear #3. Balancing Career and Family Responsibilities

So many women I know worry about how much energy they’re putting into their family demands versus their career demands. It feels like we need to be constantly tinkering with our time management to balance everything “perfectly”. Of course, there’s no such thing as perfect balance, which means we women often end up feeling as if we’re failing. It doesn’t help that there’s an enormous amount of societal pressure on working moms to balance the competing demands of home/work life in a way that best serves everyone. The pressure to excel at work while still fulfilling traditional caregiving roles can create anxiety about financial stability and achieving career goals.

Finding the balance between work and family is crucial, but you get to decide what “balance” means for you in each phase of life. Openly communicate with your partner, if you have one, about financial responsibilities and support each other in shared decision-making. Moreover, seeking flexible work arrangements – which are more common since the COVID-19 pandemic – and building a robust support network can help you navigate these challenges and maintain your financial well-being.

Fear #4. Inadequate Retirement Savings

This one is often at the top of the list of most common financial fears for women because the idea of not having enough to support yourself during retirement can be terrifying. Due to various factors such as time spent out of the workforce for caregiving, the gender pay gap, and longer life expectancy, women are at higher risk of facing financial challenges during retirement.

To combat this fear, try to prioritize retirement savings as early in your career as you can. Contributing to employer-sponsored retirement plans like 401(k)s and Individual Retirement Accounts (IRAs) can help you build a substantial nest egg for the future. Seeking the advice of financial advisors can also provide personalized retirement planning strategies based on your individual circumstances.

SEE ALSO:  Personal Finance Habits That Lead to Financial Freedom

Fear #5. Financial Dependency

This is a fear that is related to the fear of inadequate retirement savings. If you run out of money in retirement, it stands to reason that you may become financially dependent on others, whether it’s a partner, your grown children, or other family members. This dependence can lead to feelings of vulnerability and loss of control over your financial future.

If this is one of the common financial fears for women you are struggling with, carve out some time to focus on your financial independence. Creating a separate financial identity, maintaining individual bank accounts, and being involved in financial decision-making are essential steps. Establishing your own emergency fund and having insurance coverage can also provide a safety net in times of unexpected financial challenges.

Combatting These Common Financial Fears for Women

Financial fears are a reality for many women, but they are not insurmountable. By acknowledging these fears and taking proactive steps, women can empower themselves to overcome financial challenges and achieve long-term financial security. Breaking free from financial fears allows women to pursue their dreams, seize opportunities, and build a brighter and more secure future for themselves and their families.

If you're feeling overwhelmed by your finances, consider working with a financial advisor you trust. A skilled advisor can help you develop a comprehensive wealth management plan that is tailored to your unique needs and goals and can provide guidance and support as you work towards your short- and long-term financial goals. Contact my team at Flourish Wealth Management today to learn more about how we can help you develop a female-focused financial plan.

About the Author

Kathy Longo, CFP®, CAP®, CDFA®

Kathy Longo, CFP®, CAP®, CDFA®

Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.

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