We’ve heard the statistics before: a woman makes 81 cents for every dollar a man makes. The wage gap and gender inequality in the workplace are still prevalent and while these systematic problems play a major role in women’s economic status, there could be another factor keeping women from reaching their full financial potential.
A study conducted by UBS Global Wealth Management in March of 2019 found that over half of women leave long-term financial planning to their spouses, with 82% of women reporting that they think their spouse knows more about financial planning than they do. This could have serious financial consequences for women, particularly if they divorce or their spouse dies. In fact, one in five women will fall below the poverty line after divorce.
While it may seem easier to leave the finances to a partner, taking control of one’s own financial planning is critical for long-term stability, financial health, and even physical wellbeing. Below, we cover how economic empowerment impacts women, as well as ways to leverage employer benefits to achieve financial independence.
How Economic Empowerment Impacts Women
The State of Women’s Financial Future
Despite significant steps toward more gender equality in society, it’s more common for women to take periodic breaks from work to care for children, tend to family matters, and provide caregiving duties for elderly parents. As a result of these career pauses, the U.S. Department of Labor reports that women have lower lifetime retirement savings than men. With women living longer on average than men, long-term planning can create more confidence for women nearing retirement. With proper planning and saving, women can provide a stable, financially prosperous future for themselves and their families.
There are plenty of studies that show that women are often too conservative with their investment portfolios. Whether this is due to a lack of confidence, lower financial literacy rates, or preference for safer strategies, women could be losing out on opportunities to grow their wealth. Including good investment strategies in a long-term financial plan could help women build a larger nest egg.
Financial Stress and Health
When it comes to long-term financial planning, foregoing an active role could have a big impact on a woman’s physical and mental health. While women who engage in financial planning are less stressed on average, those who do not are likely to experience higher stress levels.
Financial stress could contribute to women’s health conditions like headaches, heart disease, and digestive dysfunction. There are correlations between higher debt and higher blood pressure — one study even found that finance-related stress leads to decreased cardiovascular health in middle-aged and older women.
Money-related stress has also been linked to mental health conditions like generalized anxiety disorder and depression. Those with higher debt report stress levels 12% higher than average and are also more likely to be diagnosed with depression.
Becoming Economically Empowered
It’s clear that financial independence is important for women’s health, futures, and livelihoods. Many employers offer programs and benefits to help women become economically empowered. To leverage these benefits for a healthier financial future, check out the infographic below.
With more women than ever rising to leadership positions in the workforce, women are expected to control 32% of all wealth globally by 2020. Economic empowerment and a push towards higher financial literacy rates for women will only benefit the global economy.
Whether you’re just starting out or nearing retirement, there are plenty of ways to take control of your financial future today. Sticking to a budget, capitalizing on coupons, and creating a savings strategy are the first steps towards becoming economically empowered.
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