Financial Wellness for Women: A 7-Step Guide

Women tend to ensure their family’s basic financial and other needs are taken care of before their own. It often comes with managing a household — caring for children, a partner, maybe even aging parents.

Often, women are taking care of family finances on their own: According to Pew Research Center, one in four mothers are single. And despite the fact that more than 57% of women have a job, they continue to face a lot of societal pressure to be an involved parent. Consequently, women often set aside their own financial wellness.

Financial wellness is defined as understanding and mindfully managing your income, investments and spending so you can achieve your financial goals. It’s important that you feel confident and capable of making the long-term, as well as basic short-term, financial decisions for yourself and your family. As wealth managers, we’re like the fitness trainers — helping women take care of themselves by bringing their financial picture into focus and providing guidance and encouragement to stay on track.

So here are seven positive financial health and wellness tips that you can use for every stage of your life to take care of yourself, as well as your family.

1. Take a financial inventory

The first step toward financial wellness for women is knowing what you have, where you have it and how to access it. This is especially important if you do not manage your own finances. Understand what your household assets and liabilities are by creating a personal balance sheet. Also consider:

  • Are you accumulating 401(k)s from previous employers? Do you know how to access these accounts? How are they invested?
  • Are you able to cover your expenses each month without tapping into credit card debt? Where are you spending excessively?
  • What are the gaps in your financial education and knowledge? How will you fill them? Don’t be afraid to ask questions. It’s better to know what you don’t know than to never ask at all.

2. Have a flexible financial plan

Financial planning provides a roadmap that guides you toward achieving your goals. A wealth manager can help you create a financial plan by analyzing your information and listening to what’s important to you. Your financial plan should evolve as you evolve. You can’t predict what the future holds, but you can take actions that will build your economic security.

  • Understand your spending. You may have high income, but wealth is all about what you are able to save, protect and grow.
  • Set your own goals and be intentional about how you work toward them. It’s important to quantify goals so you can realistically plan for them.
  • If you’re going through a major change like a divorce, career transition or loss of a loved one, it may be an appropriate time to review your financial plan.

3. Put your money to work

Goals-based investing is key to helping you achieve your goals. As you focus on the long-term, you should look toward high net worth investment strategies that will take the appropriate level of risk while preserving your growing wealth.

  • Line up your investment time horizon with your goals, which will be done through the financial planning process.
  • Put your savings on autopilot. Try to save money automatically in an investment account each month so you don’t think of it as money available to spend.
  • Check your tax withholding. Are you giving the IRS an interest-free loan every year? If you’re receiving large tax refunds, consider reducing your withholdings so you have more in each paycheck to invest in yourself.
  • Understand your risk tolerance and align it to your investment allocation. The amount of risk you need to take may change over your lifetime.

4. Document your estate planning and healthcare intentions

Your financial plan should include your vision of how your assets will be distributed after you’re gone. By following these estate planning tips, you can ensure that your wishes and legacy are carried on, and that your loved ones are cared for.

  • At a minimum, make sure your basic estate planning documents — will, living trust, assignment of assets, healthcare directive and durable power of attorney — are set up.
  • Think about a strategic giving plan if you’d like to support charitable causes after death.
  • Share information with the people who will be responsible for your finances or care.
  • Work with an estate attorney to properly outline how you want your assets to be distributed and identify individuals or a professional fiduciary to step in at your passing or in the event you no longer can manage your financial affairs.
  • These estate planning documents should be revisited every three to five years to determine if any adjustments need to be made based on your personal circumstances or changes to estate tax laws.

5. Protect your economic security with proper insurance

Careful insurance planning is essential to financial wellness. If the unexpected happens, you’ll feel better knowing that your financial plan won’t take a significant hit.

  • If you are working, decide whether you have enough life insurance or other savings to protect any dependents. Compare employer-provided coverage with private policies. If you have substantial wealth, there may be alternatives to life insurance policies.
  • Maximize the disability coverage if offered through your employer, especially if you’re a breadwinner mom.
  • Review your homeowners insurance coverages and make sure you have enough to fully recover from a natural disaster.
  • Don’t overlook personal liability. You may want to buy an umbrella policy that goes beyond the primary policies covering your home and car.
  • Explore long-term care insurance. Women generally outlive their partners and use more long-term care. Do you know how you’ll pay for it?

6. Build your team – you don’t have to do this alone

Just as you would for your health care, work with professionals you trust for your financial well-being:

  • Tax accountant — As your financial life becomes more complex, proper tax management is essential. If you’re facing a divorce, liquidity event or estate taxes, or you want to set up long-term philanthropic giving strategies, look for a professional who specializes in these areas.
  • Estate planning attorney — Again, if you have substantial wealth that requires generational financial planning, an estate planning attorney will know your best options.
  • Wealth manager at a Registered Investment Adviser (RIA) firm — When it comes to holistic wealth planning, which encompasses investing and financial planning, look for a fee-based advisor who is registered with the SEC. They are required by law to work in your best interest. Find a wealth manager who understands and respects your unique needs and wishes as a woman.

7. Use your resources for financial literacy

Fear is often accompanied with the unknown. Educating yourself about money matters will help you make confident decisions. We feel the best way to do this is by talking about money with family, friends and other people you trust. You can learn so much about your own feelings about wealth and managing money by hearing the experiences of others.

  • Your network is a great place to start. Talk openly with other women about financial security and experiences with money.
  • Channel knowledge and experience from your community. There are public resources available and online education platforms for almost any topic.
  • Read blogs and books and listen to podcasts to understand financial and investment jargon and strategies.
  • Attend complimentary workshops or webinars to get further educated around financial planning and investing.

It’s never too late to start thinking about your financial wellness and health. Often the greatest challenge to financial planning for women is identifying how to begin. Our biggest investment is in ourselves, so carving out the time to nurture curiosity, find professional partners and establish a strategic plan for the future are sure to result in a positive return.

Learn more about women and wealth by reading Aspiriant’s white paper, “Women Taking Charge: Six steps to feel more financially secure.