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Women and Money: An Evolved Approach

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Women at all age levels are redefining how they think about their financial journey. This includes career paths, planning for flexibility, taking charge of family finances, or being successful on their terms.

There are some generational differences among Gen Z, Millennial, Gen X, and Boomer women—but not as much as you’d think. And two main differences that set them apart from men hold across generations:

  1. Women are better investors than men1
  2. Women are more likely to approach financial planning as a partnership with a trusted advisor2
  3. Women value a financial advisor that listens to them more than men do3

Women tend to outperform men partly because they are more patient investors and trade less. This results in better performance over time and lowers costs.

As to the second result, the easy reach is to point out the men are reluctant to ask for directions when driving too. But it’s a little more complicated than that, and the reasons why women seek financial advice change as they move through their lifecycle.

How they want to partner with a financial advisor is also different. Women want to be sure that the advisor listens to them and understands and respects their priorities.

Gen Z and Younger Millennials

Younger women (Gen Z and younger Millennials) are generally comfortable and confident about money and financial planning.

They’ve grown up with more salary transparency, the proliferation of money-related apps to help with budgeting and investing, and the optimism of youth. They are interested in financial planning that fits their busy lives. They make good salaries, still have debt, are single or newly partnered, and want to get a good foundation in place.

They gravitate to financial planners that offer the planning they need in a way that they can relate to. This includes cash-flow planning, debt reduction strategies, maximizing employee benefits, and above all – helping them improve their financial literacy.

This generation of women understands the value of starting early on the path to financial independence and wants financial planning advice that can help them build a solid foundation.

Older Millennials and Gen X

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As women approach the mid-point of their careers, money becomes more complex.

Careers are in full swing, and growing wealth brings to the fore the costs of making a mistake.

These women may not have worked with a financial advisor before. Whether single or partnered, they realize that all the different pieces of their financial lives need to come together in a comprehensive plan.

For them, it’s about creating the option to stop work, scale back work, start a business of their own, or do more meaningful work that may not be as highly paid – while maintaining a current lifestyle and still save for financial goals in the future.

They realize the value of working with a financial advisor that can help them put together all the pieces of their lives:

  • Equity compensation
  • What to do with an annual bonus
  • Tax planning
  • Saving for education
  • Taking the right amount of investment risk
  • Buying a second home or income property
  • Creating opportunity with their wealth

These women want a trusted partner that explains the “why” to them, and guides them to make choices that are right for them.

As things change, they value being able to make changes to a plan to accommodate new goals or different circumstances.

Older Gen and X-Boomers

These women are driving the decision to work with a financial advisor for themselves and their families. Very often, something has sparked the need to partner with a financial advisor to solve an immediate problem.

  • A change of job
  • A spouse’s health issue
  • Aging parents
  • Imminent retirement
  • Death of a spouse
  • Tax issues

Having a trusted partner to help them sort through the issue calmly in a non-judgmental way is paramount. They want someone to help them fix problems, provide solutions, and ensure that no other avoidable situations are on the horizon.

They may realize that a spouse has always done the financial planning and that it may be time for them to understand the specifics of their wealth. They may want to plan for a retirement that allows them the time they have always wanted with their family.

This group has the most anxiety around money and the least excitement.4 They need to develop trust and have an investment plan that helps them achieve their goals – without taking on too much risk.

The Bottom Line

Women are taking control of their and their families’ wealth at all points on the age spectrum.

They value working with a financial advisor, but they are clear in their need to have someone who listens, prioritizes their goals, is a trusted partner, and truly understands how they want to build and maintain wealth.

1.Fidelity 2021 Women and Investing Study.

2, 3, 4. U.S. Bank. Women and Wealth: Exploring the Gender Gap. 2021.

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original.

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

In Celebration of International Women’s Day: A Look at Financial Milestones in Women’s Lives

International Women’s Day started over 100 years ago as a labor movement in New York City.

Women workers in the needle trades began to demand fair wages and workplace limits and protections. Women did not have the right to vote, so to effect change and call attention to the cause, they organized a march through New York City’s Lower East Side.

From the beginning, women’s day has focused on economic equality across every dimension of life, education, and work.

There is excellent news on increasing women’s participation in traditionally higher-paid, male-dominated professions. The now decades-long focus on encouraging STEM education for girls and women has dramatically increased participation in related vocations.

The U.S. Census Bureau reports that while overall women’s workforce participation is up slightly in the 20 years between 2000 and 2019, certain careers have seen tremendous inflows of women. The number of women becoming veterinarians has doubled. Women are becoming chemists and other scientists, mathematicians, and dentists at impressive growth rates. 

As women enter higher-paid professions at increasing numbers, they lower the gap between male and female salaries. And as women are creating their wealth, they are doing it in ways that reflect their lifelong needs, habits, and goals. These are – and should be – different from men at every life stage.

Here’s our round-up of some things women should consider as they work to create lasting wealth at every stage of their financial journey.

The Early Stage of Your Career

Income has likely increased substantially, but debt is often still significant at this stage. One other danger is “lifestyle inflation” – being careful to live within your means and save for the future is the foundation of wealth. Your goal in this stage is to create financial security as a baseline and then work to build flexibility. You may want to change careers, go back to school, even take time off. Saving and investing can make those choices possible.

  • Lower Debt. Strategies to lower debt quickly include refinancing to a lower interest rate, paying more than the minimum every month, and automating your payments.
  • Create a Cash Flow Plan. This isn’t about budgeting – it’s about lining up your money with your short- and long-term goals. Especially if you have lumpy income from bonuses or variable work hours, you’ll want to map out a strategy to put your money to work. Hint: open separate bank accounts to align with goals.
  • Take Advantage of Employee Benefits. Employee benefits are where it’s at to increase income and reduce taxes. Contribute at least enough to a 401(k) to get the employer match and strive for 15% of salary. Take advantage of healthcare and commuter benefits.
  • Begin Saving. Saving into an emergency fund is critical. Automate the process until you have 3-6 months of saved income.

The Mid-Career Stage

For most women, mid-career is the busiest stage. You’re focused on work, but you’re also likely getting married, having kids, buying a home, etc. Besides being the mainstay of your partner’s and kid’s lives, you need to be the CEO of your career to be sure you get paid what you deserve and that you can have the career flexibility you want.

  • Love and marriage (and finances). Yours, mine, and ours is how you create trust and set a precedent for open, honest conversations about money and goals. Begin the conversation before you get married.
  • Maximize retirement savings as soon as possible. Women have longer retirements. If you’ve left the workforce and your spouse is still working, contribute to a spousal IRA annually to keep retirement saving on track.
  • Put Investing on a Schedule. Open a taxable investment account and set up an automatic contribution schedule. Be thoughtful and understand your risk parameters – but get invested.
  • Proactively Advance your Career. Benchmark your career every year. Don’t wait to get promoted or get a raise. You can hire a consultant, build a relationship with a good recruiter, or use Linkedin effectively.

Retirement Planning

It’s finally here! You’ve built a solid retirement savings account; now you’re ready to enjoy your new life. Setting up income in retirement looks different for women than for men, because of their longer life expectancy. Think through:

  • Social Security Income. Delay claiming social security if possible. This can provide a much larger lifetime benefit.
  • Consider working for a few years. Social security bases your benefits on your 35 highest-earning years, so replacing an early career year with a much more highly paid later year can bump up your payments.
  • Life Insurance. If you’re married, think about a spousal life insurance policy.
  • Long Term Care Insurance. Get a long-term care policy in place.
  • Estate Planning. Update your estate plan and talk through everyone’s wishes for what will happen as you age. Doing it now while you’re healthy and creating a funding source will help ensure a graceful, happy older stage.

The Bottom Line

Women continue to make tremendous progress on all fronts while guiding and leading us towards a more inclusive world. Taking time to take care of your finances at every stage can put you on the path to lasting wealth.

This work is powered by Seven Group under the Terms of Service and may be a derivative of the original. More information can be found here.

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.