By Nino Pavan, J.D., CFP®
Women represent half of the population but are often treated as a niche within the industry of financial services. Today, they are key decision-makers for their families and hold significant influence on consumer spending, which shows that their impact is far-reaching.
Despite economic hurdles, women have become a major financial force, managing over $10 trillion in U.S. household assets. Many experts project this figure will triple by 2030, thanks to the anticipated transfer of wealth from Baby Boomers to the next generations. This shift means a substantial portion of assets will be managed by women.
However, many challenges remain for women as they pursue financial stability and independence. In this article, we delve into three strategies to boost your confidence and pave the way to financial success.
1. Close Your Personal Wage Gap
In spite of the achievements and unwavering resolve of women in the workforce, the gender pay gap remains a concerning reality. Women working full-time received 83 cents for every dollar earned by their male counterparts in the same occupation. This gap can have far-reaching consequences, impacting factors such as the employer-sponsored retirement plan’s “match” and eventual Social Security benefits, both of which are linked to how much you earn.
One of the most effective steps you can take to improve your ability to save and invest in your financial future is to recognize your own value and align your income with it. Failing to negotiate a competitive salary at the beginning of your career means a woman might forfeit over a million dollars in cumulative earnings over her professional career. This makes it that much more important to address and bridge the gender pay gap by advocating for the wage you have the greatest influence over—your own.
2. Prepare for the Expected and the Unexpected
No matter how much you prepare, life can—and often will—surprise you with unexpected challenges. Changes in employment, accidents or illnesses, or taking maternity leave can lead to heavy financial strain, adding to the emotional and physical distress that comes with these situations.
What you can do, however, is to focus on establishing an emergency fund in a readily accessible account. This fund should cover a minimum of three to six months’ worth of living expenses, serving as a safety net in case your income falls short. If your profession is susceptible to economic shifts, it might be wise to aim for an even higher savings cushion. We recommend starting with small contributions and progressively building up this fund over time.
3. Realistically Assess Your Risk
As a rule, women tend to take a more conservative approach to investing, which may be due to the fact that they historically have had fewer assets. But taking an approach that is too cautious might prevent growth opportunities and prolong the need to work longer and earn more.
The goal is to strike a balance between growth and protection. This might involve enduring short-term market fluctuations for the sake of long-term rewards. Though watching your investments take a dip can be unsettling, quickly pulling out of the market could potentially disrupt your savings goals.
If you’re unsure about your personal risk tolerance, a good place to start is by reaching out to a financial professional who can help you craft a risk profile that perfectly aligns with your needs.
A Champion for Your Financial Success
Although many challenges still remain in order to reach true equity for all, mastering and managing your finances is a bold step toward empowerment in every aspect of your life.
At Financial Designs, we’re dedicated to championing your financial success, providing support and confidence in making the most of your resources. Are you seeking a partner to help you navigate and embrace your financial future with clarity and assurance? Schedule a no-obligation consultation, call (909) 626 1642 or email fdc@fdcadvisors.com today!
About Nino
Nino Pavan is President and a CERTIFIED FINANCIAL PLANNER® professional at Financial Designs, a retirement planning firm in Claremont, California, with the mission of enabling individuals and families to financially prepare for and confidently enjoy their retirement years through goal-centered planning. With more than 30 years in the financial services industry, Nino is thankful for the opportunity to serve his clients by making the retirement process a stress-free one; he worries about their money so they don’t have to!
Nino holds a law degree from the University of Southern California, a Bachelor of Science in Telecommunications Management from DeVry Institute of Technology and has been a contributing advisor to Kiplinger. In addition to being a CERTIFIED FINANCIAL PLANNER® professional and Investment Advisor Representative, Nino has passed the Series 7, 24, and 63 securities exams and holds life and disability insurance licenses. He also conducts retirement and estate planning workshops for employees of major California companies. Outside of the office, Nino enjoys sports (regular and fantasy), traveling (specifically tropical destinations), walking, pickleball, church activities, and spending time with his wife Sherry and their two children, Derek and Sara. To learn more about Nino, connect with him on LinkedIn.
