I recently came across a startling statistic: 80 percent of men die married, while 80 percent of women die single1. Due to increased longevity and other societal factors, this is a reality that women must face. And when it comes to finances, the issue is even more pronounced. Studies still show that women are earning 77 cents to every male dollar2, so it is imperative that we take control of our finances today to ensure our financial security tomorrow.
The numbers don’t lie. According to the ‘Stick With It’ study from financial security company Northwestern Mutual , only 21 percent of women have financial goals that extend more than 10 years, while one-third of men have financial goals on that timeline.
The research was conducted by Harris Interactive and surveyed 1,000 men and women to gauge the financial tenacity of Americans today. It also uncovered wide-ranging insights into how women and men prioritize their goals and pursue them over time.
While the research found that in many aspects of our lives women are more goal-oriented than men, this isn’t the case when it comes to long-term financial planning. So what can we do to ensure we are adequately prepared for our financial futures?
For starters, we must view income as our most important asset. Because studies show that over time women tend to earn less, we need to be diligent about protecting our income. Additionally, we must give ourselves options. We should not build our retirement savings thinking that we will live to “average life expectancy.” Women live longer than men, and we need to plan accordingly to ensure we are financially secure for life. Remember, it’s not about getting to retirement… it’s about getting through retirement.
Further, remember that it’s never too late – or too early – to start setting financial goals for the future. The key is to start now. And there is good news for women – the ‘Stick With It’ study also found that we are better at being proactive to achieve goals, using far more strategies to do so than men. For instance, 72 percent of women set interim goals and 57 percent put goals on paper to help keep on track (versus 63 percent and 44 percent for men, respectively).
What’s more, women are more goal-oriented than men when it comes to the short-term financial picture. Nearly two-thirds of us have financial goals that span five years or less, as opposed to only 42 percent of men.
The key is to create both long and short-term financial goals. It’s important to think through what you want to save for now, and in the future. Find an advisor that you trust to help you make tough decisions and keep you on track. Then, stick with your plan.
But remember, life isn’t all about finances. The study also revealed that women define success by more than just their net worth. Women are much more likely than men to define success as being healthy (82% vs. 75%), spending quality time with family (79% vs. 70%) or having a good of a relationship with their significant other (75% vs. 68%).
My message for women: step up and take an active role in your finances. In the end, you’ll only have yourself to thank.
Rebekah Barsch is vice president of market strategy and training at Northwestern Mutual. She is responsible for leading the development of Northwestern Mutual’s strategies surrounding retirement and financial security.Barsch holds a Bachelor of Science degree from the University of Wisconsin-La Crosse, and an MBA from Northwestern University’s Kellogg School of Management.
2 Report: Women in America, U.S. Department of Commerce, Economics and Statistics Division, March 2011