Financial uncertainty in times of transition
For many of us, our financial life tends to come into greater focus during times of transition. For women in particular, there are a multitude of life changes that can create a call to action.
Some examples include:
- Rejoining the workforce after an extended absence
- Divorce or remarriage
- Debilitating or life-changing illness
- The death of a parent, spouse or child
Going through any of these major life changes is incredibly stressful, and that stress can often be compounded by financial uncertainty.
But women who work to get ahead of the financial literacy curve will be better positioned to navigate these transitions.
The financial literacy gap
Financial literacy is especially important as women begin to accumulate an increasing share of global wealth.
Consider the following statistics:
- Women control approximately 40% of global wealth, according to a 2018 Credit Suisse Research Institute study.
- Yet, in both advanced and emerging economies, only 30% of women were deemed financially literate, according to a report by the Global Financial Literacy Excellence Center (GFLEC).[i] Moreover, when presented with a series of financial literacy questions, women were disproportionately more likely than men to select “do not know” rather than taking a risk to answer the question.[ii]
- Only 39% of women polled by Willis Towers Watson believe they will have enough money to last 25 years into retirement, as compared to 54% of men.[iii]
These findings point to a general lack of confidence among women when it comes to their financial lives.
What are some ways to build financial confidence?
If you’re just starting out in your financial planning journey, the learning curve can seem steep and intimidating. But don’t let this discourage you!
It’s important to understand that financial literacy isn’t something that can be achieved overnight. It’s an ongoing process, and it’s perfectly fine to start where you are. And the more you learn, the more confident you will become.
I’d like to offer three suggestions to help you get started.
- Look for ways to tap resources already in your life that you may not have fully utilized. For instance, reach out to your benefits department at work, your insurance agent, and your tax preparer to gain a better understanding of your financial life. If you are married and your spouse is your financial partner, engage your spouse and get involved.
- Take advantage of financial literacy resources online. There are many ways you can begin the process of educating yourself, seeking information in the format that best suits your learning style. These days, our ability to access information is almost instant. Books, podcasts, websites, social media, TV shows – you name it. A good place to start is the GFLEC website, which has a variety of educational content: https://gflec.org/education/.
- Consider working with a financial advisor. It should come as no surprise that we believe working with a financial advisor is the best route to achieving a comprehensive understanding of how the pieces of your financial life fit together.
At United Capital Financial Advisors, our FinLife® process is designed to provide a 360° experience that starts with identifying your priorities and goals so that we can help you live the life you want. Once you have a financial plan in place, you’ll have a financial quarterback in your corner to help navigate the difficult transitions that life throws at all of us.
As financial advisors, we’ve spent countless hours with women who are going through major changes in their lives— whether they’re in the midst of a divorce, grieving the loss of a spouse, or struggling to provide care for their elderly parents.
Their stories are many, but those hours are filled with meaning for us. We consider it a privilege to be present for our clients during these challenging transitions.
We encourage you to begin taking proactive steps to improve your financial literacy as soon as possible. Your future self will thank you.