Why Women Need to Focus More on Their Retirement
By Leigh Singleton
According to a recent data survey conducted by digital banking platform, Monifi, 85% of men are actively saving a portion of their income, while only 77% of women are currently able to put away the same portion of finances. Leigh Singleton, Director of Financial Education, shares her top three tips for ensuring women are budgeting, saving, and preparing their finances to keep up with their male counterparts!
She also reminds us that on average, women make $0.82 for every $1 made by men. (this does not even begin to break down the additional loss seen by minority groups) With the current financial system, this translates into a greater need for women to take extra care of their finances.
“BUDGET BEFORE [HOME] BUYING”
Oftentimes when we are looking to purchase a new property, we find ourselves wrapped up in the whirlwind of excitement, stress, and time constraints of getting in an offer. Although ensuring you get the right home for you (and your family) is important, so is getting to know the finer financial details of the listing.
Always budget the full expenses before signing a lease or making an offer on a home. It’s important to recognize the full cost of your housing choice, not just the rent or mortgage payment, by researching the average utility costs, insurance premiums, and HOA fees. That cute bungalow may seem reasonably priced but might have astronomical utility bills due to an inefficient heat/air system or poor insulation. The most common rule of thumb is that your total housing costs should be no more than 30% of your gross monthly income (which is your total income before taxes and deductions).
“GET TO KNOW YOUR SPENDING HABITS”
Becoming aware of your spontaneous shopping habits are essential to building a strong savings. We have all gotten caught up in Amazon’s FREE overnight shipping deal and pressed the “Complete Order” button before truly thinking through our purchase. Tracking your spending can allow you to identify where unplanned or habitual purchases may be siphoning money that could be put towards your savings goals.
Thoroughly looking through your monthly bills or even keeping an excel tracker of your purchases can be a great step in spending your money where it is most important. Categorizing purchases into necessities vs. wants is also a great trick to visually break down where your income is being allocated each month.
Banking apps such as Monifi will automatically assist in helping you break down your spending and offers “saving buckets” so you can pre-allocate your funds towards vacations, utilities, car payments, and more!
“GET READY TO…RETIRE”
A woman's marital situation can greatly affect her need to plan for retirement. A woman’s life expectancy is, on average, longer than a man’s; based on her and her husband’s age difference, she may outlive him by several years and will need to plan accordingly.
Second marriages and step-children can also factor into retirement planning. If you know your husband owns separate assets, it is important to communicate with your partner and confirm how those assets are planned to be split amongst you and any children.
In 2021, 63% of men met their savings goals, while only half of women confirmed they had met theirs…with lower income and longer life expectancies women have a greater need to refocus on their current finances and savings, but with a few easy changes, we can be on our way to a flawless retirement!