It’s hard to believe that in 2022, women still face unique financial challenges. Longer life spans, less retirement savings, gender pay gaps, long durations of time spent out of the workforce to manage the home and children are just a few challenges.
The roles of women in the home and workforce have changed drastically. Nearly half of all women are primary breadwinners in their households, and women now outnumber men in the U.S college-educated labor force by 50.7%, according to a Pew Research Center analysis.
Life events and milestones for women in their personal lives and careers can affect their financial position and should result in solid investment strategy. So, no matter your age, career, relationship status, financial planning will give you the confidence to enjoy life, stress less, and tackle challenges head regardless of what life swings at you.
The Defender spoke with Chelsea Williams, financial representative at Northwestern Mutual in Houston to talk about what women can do to get ahead in their financial planning strategy.
Defender: It is said that women’s mindset around money differs than the way men think about money. How is that?
Williams: Women have to consider taking off work, if we have children things happen and we want that stability, so we’re thinking of the “what ifs”. There are certain actors like planning for retirement, maternity leave, being caretakers of our parents to create that safety net for our families. Men don’t have the role of bearing or nursing the children. They’re don’t have to make the major decision to be on leave. They have more flexibility and options.
Defender: What are the biggest money mistakes women make when it comes to finances?
Williams: This is something that can go across the board for both men and women. A common mistake would be that both genders don’t prioritize things properly. Having enough money to take care of discretionary things like an emergency savings, and retirement.
Defender: A recent study by Northwestern Mutual and Forbes Insights reveals that although the majority of women feel confident in their life goals, only 27 percent believe their money goals are achievable. Why such a low percentage?
Williams: It’s due to the fact that there is a wealth gap. Black women make $0.79 to every $1.00 a white man makes. We’re already making less and then on top of that we have to make sure their families are taken care of. We are already behind financially, and we are psyching ourselves out.
Defender: As a financial representative and a woman in the industry, how do you set the course for your clients?
Williams: Before I started this career, I worked in accounting. I was trying to figure out the next step and how I could impact others. So, I entered this career with the mindset wanting to motivate others. Your finances have everything to do with what’s important to you and your personal goals and how it ties back to your finances. I guide them to understand what they need to do today to break that generational curse and it all starts with them. It causes a mindset shift. There is this quote that says “Those who fail to plan, plan to fail.” When I talk to individuals, I let them open up and tell me what their goals are to lay the foundation. Then we will look at the budgeting and go from there.
Defender: A study by the American College Center for Economic Empowerment and Equality which involved 3,500 middle income Black women found that 60% of participants had difficulty finding financial professionals they trust, followed by services being too expensive. What advice do you have for other women who might have those concerns?
Williams: Usually it’s word of mouth or through referrals from a potential client’s friend or family member who has a relationship with an advisor or representative. Those that you trust can give insight to their relationship with the financial professional so you can be more comfortable going into that meeting. It’s important to do your research first to find out if this is a person you’d want to work with long-term. You are not obligated to do business with a representative as soon as you meet them. Interview them and ask questions. That’s how you build trust. As for the costs, financial representatives don’t typically charge for the first meeting unless it’s somebody who is a fee-based planner like a certified financial planner.
Defender: What are the key components to a good financial plan?
Williams: I’ve said this before but identifying your goals is one, understanding your cash flow and assessing your monthly income and expenses, creating a budget, managing your debt, building your savings, saving for retirement, and invest.