Financial planning for women is not much different than for men, at least in basic strategy. Both men and women have similar goals for saving and investing, and investing strategies do not differ widely between genders. Financial planning for women may be complicated by several conditions that men may not face. Careful planning and investment knowledge can help women prepare to save and invest wisely for the future.
One of the factors that may affect financial planning for women is that women generally have a longer lifespan than men. This means that they will need to build retirement and pension plans that are longer, on average, than their male counterparts. Some financial experts suggest that this statistic alone means that women need to save more, and start investing earlier, than men.
In most parts of the world, it is also common for women to take time off to bear and raise children. While some countries have generous maternity leave policies, this can still slow the growth of pension and retirement funds and reduce lifetime earnings as well as savings. If a woman intends to take time off to raise children, it is important to create a savings plan that will continue to grow, even minimally, for the duration of leave.
Throughout most of the world, women still suffer pay inequities. This means that for the same job, a woman will typically earn less than a man over a career. Similar to leave and lifespan, this consideration stresses the importance of early planning. Women may have to save at a higher rate than men to ensure the same future finances.
Good financial planning for women begins in education about investments. Experts rarely recommend simply leaving savings in a basic savings account, but instead stress the importance of learning basic investment strategies and planning techniques. There are hundreds of books and websites devoted to basic financial planning for women and for men. Understanding how retirement accounts and investments work is a key to maximizing savings.
All the knowledge in the world may be meaningless unless a person has clear financial goals. These goals may be widely different, from wanting to save enough money to buy a specific type of house to wanting to ensure a retirement filled with travel and leisure. Specific goals can help to reduce the mystery of investments to a simple set of equations: to have a specific amount of money upon retiring, a person must save X dollars each year for Y number of years. Setting short- and long-term financial goals can also serve as a means of checking on progress to see if an investment strategy is working correctly.
