Three money moves to help women minimize financial stress

As the nation celebrates Women’s History Month, Fidelity’s 2024 Women’s History Month Study finds that stress levels remain consistently high among women, no matter their total household income. The research identifies three financial behaviors to help women of all ages and income levels reduce their financial stress: saving for emergencies, saving for retirement, and thinking ahead.

Taking financial action, however, makes the biggest difference in decreasing stress, with women who made financial moves in the past 6 months indicating less stress than women who haven’t, the survey said. “It’s not uncommon to feel stress when it comes to finances, so it's critical we support women by providing proven ways to help them combat this feeling and build financial confidence,” said Sangeeta Moorjani, head of Tax Exempt Markets for Fidelity Investments. “We believe knowledge truly is power and are committed to supporting women no matter where they are on their financial journey, by providing access to financial education, planning and tools, so that everyone can feel confident in their ability to build a strong financial future.”

Three steps that can yield big results

With most women indicating financial stress, Fidelity identified three key money moves that can help women reduce financial stress, based on the company’s research on customers who participate in a workplace retirement plan:

Saving for Emergencies: Financial stress levels drastically decrease with each additional month of emergency savings set aside. More than 4-in-5 women (81%) with no emergency savings feel a fair amount or a lot of stress. Once women save three months’ worth of emergency savings, only 1-in-4 women (26%) report high stress levels.

Saving for Retirement: Small increases in retirement savings can lead to big results when it comes to women's financial stress. Nearly 3-in-5 women (59%) who save up to 2% of their household income for retirement feel a fair amount or a lot of stress. Once women save between 10 and 14%, only about 3-in-10 women (32%) indicate similar stress levels. This number continues to decrease as women increase their retirement savings contributions, indicating financial stress lessens with every incremental increase in contribution.

Thinking Ahead: Taking the time to outline financial goals and needs for the next few months can lead to less financial stress. More than 7-in-10 (73%) women who only think ahead a few days feel a fair amount or a lot of stress. Once women plan for a few months ahead, that number drops down to less than 4-in-10 (38%).

Reasons for women's financial stress

In explaining why stress levels are so high among women, MDRT Life Member Aviva Sapers said that “we are currently in very stressful times politically and economically with the recent inflation and upcoming elections. Since women tend to carry large burdens to take care of their families, both children and parents, it is a constant source of stress. When people depend on you or when you are responsible for the wellbeing of others, it can be extremely stressful.” Sapers is the CEO of Sapers & Wallack, Inc.

And what can advisors do to help women reduce their stress levels? First, Sapers said that women should absolutely be included in the household financial conversations. Second, having a financial plan done that maps out their likelihood of being able to achieve their financial goals can certainly reduce the stress that women have concerning financial matters, and good advisors should be helping them with this. “Products like annuities that can help provide income that one cannot outlive have become more popular among advisors today and can help eliminate some of the financial stresses women face,” she added.

Raising women's financial confidence levels

While 78% of women took money actions in the past six months, only 19% feel confident with their money, indicating that women continue to underestimate themselves, the survey pointed out. To help better understand which actions can make the biggest difference in financial confidence, Fidelity’s research identified the actions that women who feel confident with their money are more likely to take. Interestingly, the survey said, the same actions that reduce financial stress can also improve confidence. These include:

• Contributing to an emergency fund
• Saving more for retirement
• Beginning to invest
• Working with a financial professional

Fortunately, the survey said, these are the areas that women are planning to focus on in the months ahead.

Breaking down stereotypes

The survey also pointed out that women are actively breaking down old stereotypes and misconceptions, which have held them back from feeling financially confident. These include the idea that men are better at managing finances. More than 1-in-3 women have unlearned the stereotype that men are better at managing finances, the survey said. Younger generations are leading the way, with 44% of Gen Z women saying they have “unlearned” this stereotype, compared to 32% of Millennial women and 29% of Gen X women.

What’s more, women are no longer treating money as a taboo subject and are more open to talking about money with their peers. Fidelity’s latest study found that nearly half of women indicated they were more open about their money with their family and friends in the past six months, or plan to be in the next six months.

But more work needs to be done

While women have made valuable progress in building confidence, more work still needs to help them address the persistent confidence gap, the survey said. While more than half of women (52%) believe women are better at managing finances; yet, 65% of women believe men have had a better return on their investment in the past 10 years, indicating a confidence gap among women.

“Encouragingly, women today are debunking the financial stereotypes that have historically held us back,” said Lorna Kapusta, head of Women and Engagement at Fidelity Investments. “Over the past few years, we’ve seen women make incredible progress with their money. Even though women are making smart money choices, we’re also seeing them continue to doubt themselves.

We are committed to not only helping women take the next step on their financial journeys, but also feel confident in their financial choices and their financial futures.”

Talking about money at a young age

In another positive shift, the survey found that parents are speaking with their children about money and finances with greater frequency than their own parents did. While 72% of respondents claim their parents discussed financial topics, 84% of today’s parents speak to their kids about these topics—and what’s more, parents are talking to sons and daughters at the same rate about financial topics, an encouraging change from previous generations. Prior Fidelity data found that teen boys were 5 percentage points more likely to claim their parents spoke to them about investing than teen girls.

This shift is encouraging, as financial education at a young age is essential in helping the next generation achieve financial confidence and financial mobility, the survey said. To help build a future generation of financially savvy women, Fidelity is launching a new learning series for parents and teen girls. The program, Women Talk Money: Teen Girl Learning Series, will help teen girls build positive money habits for future financial success.

Helping women take charge of their financial futures

In addition, Fidelity said that it has free and accessible resources and education to help women make the most of their money, no matter where they are on their financial journeys:

• Women’s History Month Event Series: Fidelity is bringing together celebrity guests and Fidelity leaders for a free, month-long event series to help inspire women to take the next step with their money and achieve their financial goals for the future. The series will feature special guests Viola Davis, award-winning actress, producer and author, Padma Lakshmi, an Emmy-nominated producer, television host, food expert and author, and women across Fidelity. Conversations will focus on unlocking your money’s full potential, building career success, creating a financial playbook, building healthy money habits, balancing sandwich generation responsibilities and teaching kids about money.

• New Learning Series for Teen Girls and their Parents: Launching in April, Women Talk Money: Teen Girl Learning Series is a free digital, self-paced learning series designed to help parents and teen girls build positive money habits. Registration and more information can be found here.

• Women Talk Money: Fidelity’s Women Talk Money community offers a forum for real talk about money, investing, careers and other topics top of mind for women, through live events, on demand content and other actionable resources to help members take their next best steps with their finances. It’s free to join for everyone.

• Year-Round Support Built for Women: Fidelity launched a new website experience last year built for women, which provides insights on the unique factors that women often need to plan for, when to save and invest based on your individual situation, which accounts make the most sense for your goals, and clear next steps to move forward.

The Fidelity study presents the findings of a national online survey, among 3,008 adults, 18 years of age and older. Interviewing was conducted January 3-12, 2024, by Big Village, which is not affiliated with Fidelity Investments. The generations are defined as: Boomers (born 1946 - 1964), Gen X (born 1965 - 1980), Millennials (born 1981 - 1996), and Gen Z (born 1997-2012; only those ages 18+ were considered for this study).

 

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

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