Statistically, women live longer than men. A 2021 CDC study found women live more than six years longer than men. This means women typically need to save more for retirement to ensure they have a sufficient amount of money to live comfortably. Yet, studies have shown that women are more risk-averse than men, therefore less likely to invest in the stock market. This can lead to missed opportunities for growth and lower returns on investment. Ho, Milevsky, and Robinson (1994) stated that women should hold riskier portfolios than men because of their longer life expectancies, assuming otherwise identical preferences.
Women have historically faced significant barriers to financial literacy and have historically been expected to prioritize domestic responsibilities over financial matters. However, women are equally capable of becoming as financially literate as men. It’s crucial to recognize that financial literacy is not a gender-specific skill. As more women enter the workforce and take on leadership roles, this mindset is changing.
Improving financial literacy is essential for building wealth. This involves expanding access to resources such as retirement planning guides, budgeting tools and investment advice. By eliminating barriers and increasing access to financial education and resources, we can help achieve greater financial security and build a more equitable society for all.
So, what specific steps can be taken? First, it’s imperative to educate yourself on financial matters. This can involve reading books, attending workshops or seeking advice from a financial advisor.
Second, you should start small and focus on setting achievable financial goals. This could involve creating a budget, paying off debt or building an emergency fund.
Finally, it’s always a good idea to take advantage of workplace benefits such as retirement plans and health insurance, and seek out opportunities for professional development.
Financial literacy is vital for everyone, but it’s especially important for women to take steps to improve their financial education and skills. By addressing the core causes of low financial literacy and taking practical steps to improve financial knowledge, women can achieve greater financial independence and build a secure financial future.
Reference:
Ho, K., Milevsky, M. A., & Robinson, C. (1994). Asset allocation, life expectancy, and shortfall.
Financial Services Review, 3, 109–126.
