Top Financial Fears That Affect Women

Posted by: Joseph Kuo | March 4, 2022

Here are five common fears women have when it comes to money.

Financial fears can paralyze anyone from making a major decision about their finances. But for many women, money matters can be particularly overwhelming. In fact, women are more likely than men to name “living paycheck to paycheck” as their number one financial fear versus just 17 percent of men. Adding to the challenge is the unfortunate reality that women often do not make as much as men working in the exact same position.

Why the big difference? Here are five common fears women have when it comes to money and some ways to address them.

Financial Fear #1: They Won’t Be Taken Seriously

Women have come a long way in terms of independence and earning power over the last 50 years, but investing and money management services are still primarily an industry run by men and geared towards male clients. This view can leave women feeling concerned about how financial professionals will treat them and in extreme cases, marginalized during actual meetings. While the actual range of experiences may vary, women may feel more confident simply by learning more about finances on their own or by working with a female financial advisor.

Financial Fear #2: They’ll Run Out of Money

Both men and women are afraid of outliving their retirement savings, but women find it a much more pressing concern for one simple reason: women tend to outlive men by as much as five years. This means women, on average, will require almost a fifth more in their nest eggs than their spouses. Thus, it’s even more essential for women to start saving as early as possible and working out a sound investment plan to maximize growth. They might also want to wait until they are fully vested in their maximum Social Security benefits before claiming them.

Financial Fear #3: They’ll Lose Their Spouse

The loss of a spouse can have severe financial repercussions for many women. This is particularly true for women whose spouses were the primary earner in the family and were the primary manager of the family finances. Many women are completely unaware of the family finances until the spouse is gone. A wife can ease her economic apprehension by getting more involved in the family’s money matters. The first step is finding out about all the family’s accounts and investments to make sure she will have full access (by being listed as beneficiary) in the event of her spouse’s passing. It is also a good idea for both spouses to have life insurance. Experts suggest having a minimum policy that can cover between 6 and 10 times what would be the lost annual earnings, plus enough money to pay off any outstanding debts (such as the mortgage).

Financial Fear #4: They’ll Lose Their Home

It is hard for anyone to imagine losing their home, but it can happen. That is why it is smart to aggressively pay down any outstanding money owed on a home to become mortgage-free, or to at least decrease the monthly payment, as soon as possible. But it is important to be aware that while a home is an investment, the upkeep of a large home is a financial drain both in the larger mortgage as well as in increased maintenance costs and property taxes. Older homeowners whose children have moved out on their own may want to think about downsizing to a home which will require upkeep before it becomes an absolute necessity.

Financial Fear #5: Having to Pay For Their Kids Forever

There is no getting around the fact that having and raising children is expensive, but being a great mom doesn’t mean paying the kids’ bills forever. Although it’s ideal to plan for the kids’ college educations, parents need to know that it’s healthy to set boundaries when it comes to providing financial support for adult children post-college. In the long run, it’s the right choice for everyone.

Money is a complicated topic, and one of the best ways to ease the financial fears associated with it is to talk with a professional money advisor who can create a personal plan to give you peace of mind.

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