This is a sponsored conversation brought to you by SheSpeaks and Prudential.
I am proud to share that I really got a handle on my finances these past few years. I paid off all of my debt, started saving for a house, expanded my business in order to bring in more income and most importantly… started saving for my children’s future. It dawned on me one day that I was going to have three children that will eventually need cars… three children that will someday be going to college. While I have spent much of my life living in the moment, I started to seriously consider the importance of saving for their future expenses. There are so many benefits to saving for your children’s future and I am going to share a few with you today!
A few years ago I decided to start putting all of the money my children received during holidays and special occasions into a savings account. By starting a savings plan early, I am reducing the burden of taking on high debt loans in order to pay for their college education. It is always better to save than it is to borrow! Don’t become dependent on the idea that your child will get scholarships… there are many more expenses such as room and board, books, supplies, food, transportation and personal expenses that are not covered through scholarships and student aid. Click here for more information about saving for college from Prudential.
If you are starting to panic because you are just realizing you have not started saving for your children’s future… you are not alone! The fact is that many women are simply unprepared for their financial future. There is no doubt that women have taken on many new roles and responsibilities in areas of their lives. But when it comes to taking charge of their finances… statistics don’t lie and they are showing that women are still falling behind. Here are four of the key challenges women are facing when dealing with their finances:
Wage and Income Gap
- The average woman working full-time earns 79% of the income earned by her male counterpart.1 This is because of many issues – lower likelihood to negotiate salaries, time out of the workforce, differences in pay.
- The wage gap not only impacts women’s 401K balances over their lifetime but it also impacts their social security payments. Predictably women’s social security benefits are 27% lower than that of their male counterparts.2
Women don’t invest to the same degree as men.3 Women’s discomfort with investing comes at a high cost for them: They are apt to delay investing, invest more in lower risk, lower return investments and are more likely to run out of money in retirement.
Women Are Living Longer and Living Alone
Women outlive men by an average of 5-6 years.4 Are they prepared financially for these years?
On average, women in the U.S. spend 28 hours per week on household chores – 65 percent more than the average for men.5 That is uncompensated work and it does not figure into women’s financial planning. Prudential has created a tool called the “Value of all you do” that lets you very quickly quantify the value of all the household chores you do on a daily basis. What you would need to pay someone to do those for you
A few other facts to consider is that on average, women have 30% lower retirement balances than men6 and 44% of women have no life insurance. Even among the ones that do own life insurance, most are underinsured.7
I believe as a mother to two impressionable young daughters, it is up to me to show them that they can be in control of their finances! It is so incredibly important that we not only help the future generation of women, but help women now feel more confident and comfortable with their finances. Women must be more proactive and educate themselves about these issues, so that they can prepare and protect themselves.
Prudential has been researching these issues for quite some time and they are aiming to empower women with financial solutions so they can be confident that they are making the right decisions for both themselves and their families. Click Here for more information and to find a Prudential advisor near you to help you own your financial future. I hope this post has given you some things to think about and consider when it comes to your finances and your family’s future!
- 1. S. Census Bureau, Historical Income Tables Table P-40: Women’s Earnings as a Percentage of Men’s Earnings by Race and Hispanic Origin, 2016
- Social Security Administration, Fast Facts and Figures About Social Security, 2016.
- Source: Prudential Retirement analysis; National Center for Health Statistics, Health, United States, 2015: With Special Feature on Racial and Ethnic Health Disparities. Hyattsville, MD. 2016
- Organisation for Economic Cooperation and Development, October 2016, http://stats.oecd.org/index.aspx?queryid=54757
- Prudential Retirement analysis reflecting defined contribution plan balances of Prudential record-kept plans as of December 31, 2015
- LIMRA study, Life Insurance Ownership in Focus, U.S. Person-Level Trends: 2016