Women and men are different -- not only physically, but also fiscally. I confess to having scoffed at financial books targeted at women, thinking that the importance of saving and investing is the same for both genders. After all, a stock such as Wal-Mart
The bad news
I must also concede that there is a case to be made that women's financial needs are a bit different from those of men. Here are some sobering statistics from the Women's Institute for a Secure Retirement and the National Center for Women's Retirement Research:
- The average woman spends 15% of her career out of the workforce caring for her children and elderly parents. For every year out of the workforce, a woman has to work five years to recover the lost income, pension coverage, and career promotion.
- Women retirees receive about half the average pension benefits that men receive. This is partly because women change jobs more often than men and because many women have jobs that offer no pensions.
- Women, on average, live longer than men and, at some point in their lives, about 90% of women will be solely responsible for their finances.
Too many women end up widowed or divorced and suddenly find themselves on shaky financial ground. They ignore financial matters, either letting someone else tend to them or simply putting off dealing with them. (Of course, many men are guilty of the same thing.) Don't let this happen to you, or to anyone you care about. Keep reading and consider forwarding this article to others -- click on the "Email this page" link to the right.
The good news
Fortunately, all isn't lost -- even for middle-aged women. It's rarely too late to begin to take control of your financial future. Here are 10 tips, some adapted from a new book, It's More Than Money -- It's Your Life by Candace Bahr and Ginita Wall. Don't let the tips overwhelm you. Perhaps, choose one or two to work on first.
- Consider consulting a professional -- or at least remember that they're out there and available to you. There's no shame in asking for help and no need to go it alone. Take the time to find a trustworthy financial advisor with whom you're comfortable. You'll feel a surge of relief as your financial ducks get placed in a row. We offer some guidance on finding a good pro -- and we even have an affordable personal financial advisor service, too (with a free trial available now).
- Understand that you don't need a stash of several thousand dollars to begin investing. There are options such as direct investing plans or dividend reinvestment plans (called Drips), which permit you to invest in such major companies as Coca-Cola
(NYSE:KO), Intel (NASDAQ:INTC), and General Electric (NYSE:GE)with sums as small as $10 per month.
- Be properly insured. This means passing on insurance you don't need, such as life insurance if no one depends on your income. It also means looking into and buying insurance you have a good chance of needing one day, such as disability insurance, long-term care insurance, or renter's insurance. (Learn more in our insurance center.)
- Take advantage of your 401(k) plan at work, if one is available. (Those toiling in schools and non-profits should maximize their 403(b)s.) If your employer offers to match money in these plans, then try to stash as much as you need to in order to receive the most matching money available. That's free money, so don't leave it on the table.
- Tend to your credit rating. Some married women have few financial accounts in their name -- that can hurt you should you suddenly become single. Establish a good credit rating by using charge cards (in your name) responsibly and paying off debts on time. Here are more credit tips.
- Have an emergency fund, with three to six months' worth of living expenses socked away in an accessible short-term savings account. Note, though, that for some people, even six months' worth isn't enough. If you generally take a long time to find a new job, or if you have major expenses coming up, such as a car down payment or if several people depend on you and your income, then you might want to have even more aside.
- Don't tackle financial matters on your own unless you want to. Consider banding together with a few friends or relatives and forming an investment club. If you don't want to be bothered with all the paperwork, you might form a club that does everything together except pool funds. You can discuss what you learn about money and selecting promising stocks, and then just invest individually.
- Get your family talking about money, so that you're all on the same page. We have resources to help couples manage their finances, and we offer an area for Teens and Their Money, too.
- Begin (or continue) learning! There are scores of resources available to you, such as our How-to Guides and online seminars. Not to mention, lots of educational articles available for free on our website. This long list of resources I prepared for teens is also very relevant to adults.
- Jump in! Don't invest any significant money in individual stocks until you're comfortable that you know what you're doing. If you need a good motivator, plunk a little money into one or two well-regarded companies that interest you -- or into an index fund. If you're looking for some recommendations, leaf through financial magazines or check out our stock newsletters, which have recommended some real winners.
Selena Maranjian is a Senior Worrywart at The Motley Fool. For more about Selena, view her bio and her profile . You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.