When it comes to money, women face some higher hurdles than men. Women tend to live longer, so their money needs to last longer. Since women are also more likely to spend time out of the workforce for a number of years while caring for children or aging parents, they often have less money than men to begin with. And, of course, women tend to earn less than men -- about 78 cents for each dollar earned by men (as of 2013) and about 83% of men's salaries (based on median weekly full-time earnings in 2014). Given all these factors, it's critical for women to be smart with their money -- so that it can serve them well and last throughout retirement.
Below are five powerful money moves for women.
Get out of debt and stay out of debt
According to various studies, women are much more likely than men to carry credit card debt, though their average balance owed is smaller . In other bad news, a 2012 study found that women are more likely than men to carry a credit card balance, make the minimum payment on their credit cards and be charged a late fee. This is all dangerous, because credit cards often charge outrageous interest rates of 20% or more annually. While plenty of women carry no revolving debt, plenty of others owe $10,000, $20,000, or more. If you owe $10,000 and are being charged 25% in interest, you're looking at $2,500 per year in interest expenses alone. Yikes. It's extremely hard to get ahead financially when high-interest rate debt keeps pulling you deeper and deeper into a hole.
Make it a priority to get out of debt as soon as possible and to stay out of debt. Don't dismiss the idea of getting a second job for a while or cutting back significantly on your spending.
Live below your means
A great way to stay out of debt and to get ahead financially is to live below your means. You might want to do a little budgeting in order to achieve this. Write down all your regular sources of income and then keep track of all your spending over one to three months. (Add in the cost of infrequent expenses, too, such as home insurance payments or property taxes.) Learn where your money is going and then make adjustments to your spending so that you're getting by while also saving and investing for the future.
There are lots of relatively painless ways to spend less and save more, such as brown-bagging a few lunches per week, cutting back on costly fancy coffees, and mowing your own lawn. If you're a smoker and can quit, you can save thousands of dollars per year -- while adding years to your life.
Don't leave your money management to others
Many women regret having left all the money management up to their spouses when he or she dies. Don't let yourself end up one day both grief-stricken and facing the daunting task of figuring out where your investments are and how to manage them. Ideally, go over household and long-term finances with your partner regularly. Know how much money you have where and how to access it.
Being on top of money matters in your household might also keep you from discovering one day that your partner has racked up lots of debt or been a poor financial manager. Learning about personal finances and how to make good money moves isn't hard, and you might even find that you like it.
Be sure to have a financial plan
According to the 2015 Retirement Confidence Survey, only 28% of unmarried women have tried to calculate how much money they will need to have accumulated by the time they retire -- vs. 43% of unmarried men. A Fidelity Investments survey reports that half of the women who responded were worried about whether their money would last through retirement. Don't be one of these women. Take the time to formulate a plan. Figure out how much money you will need in retirement and where it will come from. And don't just count on Social Security because, as of September 2015, the average Social Security benefit was $1,338 per month, or about $16,000 per year, which might be hard to live off. And you can bet that the average benefit for women was lower.
Your plan might include Social Security income, income from a fixed immediate annuity, income from stock investments and dividends, interest income from bonds, and/or rental income from properties you own. Be sure to have an emergency fund, too, to protect you in case of a financial disaster such as losing a job or facing a costly medical issue. Aim to have between three and nine months' worth of expenses (including housing) readily accessible in highly liquid funds during retirement.
Save and invest effectively
Once you know how much you'll need in retirement, you'll likely need to save and invest aggressively -- especially if you're no longer in your 20s or 30s. You might use an online calculator to help you with that. By tweaking the amount you plan to save each year, how long your money can grow, and the average annual growth rate you expect, you can arrive at a workable plan. For example, if you have $50,000 in retirement accounts now and can sock away $8,000 per year, while aiming to average 8% in annual growth, you can end up with more than $600,000 in 20 years.
How, exactly, should you invest? Well, as you read more and learn more about money management and investing, you'll find strategies and approaches that you believe in. You can also do well simply by investing in low-cost, broad-market index funds, such as the SPDR S&P 500 ETF, Vanguard Total Stock Market ETF, and Vanguard Total World Stock ETF. Respectively, they distribute your assets across 80% of the U.S. market, the entire U.S. market, or just about all of the global market. You can just leave your money in them for years. You can invest in index funds through IRAs, most 401(k)s, and regular brokerage accounts.
Women do face higher financial hurdles than men, but that doesn't doom them to scraping by in life. By making smart financial moves now and regularly, you can live well now and later, making your money last throughout your lifetime.
Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.