March 2011

Ten Things Women Can Do To Protect Their Financial Futures

Washington Dollar

During National Women’s History Month in March it is interesting to note that the woman on the one dollar coin is Sacagawea, the Shoshone guide who helped lead the Lewis and Clark Expedition. The honor is especially fitting because women often guide their families’ finances yet sometimes also need special guidance themselves when it comes to saving money.

According to recent data by the Department of Labor, women make 79 cents on average for every dollar earned by a man. This means that the average American woman and her family could lose an estimated $700,000 to $2 million over her lifetime impacting Social Security benefits and pensions. Therefore, the long-term financial health of women is of importance to their husbands, sons, fathers and brothers too.

Women who miss productive earning years in the workforce to care for children and elderly parents will also be likely to receive lower pension and social security benefits. Yet, since women have longer life expectancies than men, they will need more money for additional years of retirement.

Here are 10 things women should do now to protect their financial futures:

  1. Take the time to calculate your net worth and learn about your family’s finances including retirement plans, insurance policies and bank accounts.
  2. Realize that you may be widowed or divorced someday and make sure your name appears on all of your family’s accounts as a sole or joint owner to establish your rights to at least a portion of the assets.
  3. Social Security provides only about 40 percent of pre-retirement earnings. Estimate how much money you will receive by using the online calculators www.socialsecurity.gov/retire2 or checking the annual Social Security statement that you should receive each year.
  4. Pay down your debt. For every nonessential treat like a $4 cup of coffee, save half that amount to put toward your debt. If you can’t afford to save the $2, you shouldn’t be drinking expensive coffee.
  5. Resist the urge to put others’ financial needs before your own. Treat children, grandchildren and other family members after you have paid your own bills. Don’t lend money if it puts your own financial security at risk.
  6. Don't be afraid to ask for more information or help. Non-profit credit counselors, such as those at American Debt Counseling, Inc., will go over your unique financial situation with you and offer you their expert guidance at no charge.
  7. Start living leaner now by canceling subscriptions to magazines, video clubs, gym memberships and premium cable channels that you don’t use. You won’t miss the services and you’ll enjoy having the extra money.
  8. If you haven’t done so already, find out about any retirement benefits or retirement plans available to you at work and sign up to participate.
  9. Take care of your health. In one study cited by the National Institute on Aging, one third of retirees age 55 to 59 said poor health was a very important factor in deciding to leave the workforce.
  10. Look into taking an investment or personal finance course at a women’s group, community college or adult education center.