Women are on track to control $72 trillion in wealth in the U.S. by 2020.¹ Yet, there are still financial challenges women face on a daily basis — the wage gap, building enough savings to last through retirement and managing diverse life journeys that can include striking a balance between career and raising a family or spousal and elder caregiving.
“At the end of the day, the more knowledge you have, the better prepared you’re going to be as you move through your life,” says Mary Martuscelli, West Region president of U.S. Bank Private Wealth Management. Martuscelli shares her thoughts on how financial education can help women feel confident in their financial life.
Q: What are some ways women can feel more empowered in their day-to-day financial decisions?
Martuscelli: Basic financial education is critical. Know your credit history and build a good credit report. Understand how investments work and what fees are associated with them. Part of this is [developing] relationships with key financial professionals, whether it’s a financial advisor, private banker, or it’s working with an attorney or CPA. A team of trusted professionals can help set you on the right course, but your own financial education will go a long way in helping you make decisions unique to your needs and aspirations.
Q: Money and finances can be an uncomfortable topic to discuss. What are some ways women can feel more confident in conversations about money and their financial goals?
Martuscelli: One way is to engage with other women in your community — ask for recommendations and talk about obstacles. You most likely know women who have faced or are facing similar issues. Talking with and learning from a friend or colleague can be very helpful. For example, I see women starting investment clubs, bringing together eight to 10 women a month to discuss a chosen financial topic. It can be a good way to educate yourself and your peers in a comfortable environment.
Q: What do you see as being women’s biggest financial challenges and what should women be focusing on to overcome them?
Martuscelli: We often see situations in which one individual in a household takes care of all the finances. In one study, 51 percent of women said they’re the chief financial officer of the household.² One problem with that dynamic is if that individual passes away, the rest of the family is left without an understanding of their financial situation. Approach your family’s finances as a team effort. Make sure everyone understands your family’s core values when it comes to money. And, I cannot stress this enough, have your financial documents in order, and be sure your family is aware of and has access to them. Having a living will and financial power of attorney designated can provide peace of mind for all involved if they’re ever needed.
Q: Women, on average, earn 80 cents for every $1 a man earns.³ This gap in earning potential compounds over time and can impact retirement savings. What are some of the steps women may want to take to potentially mitigate the gap?
Martuscelli: Consider working with a financial professional and speak early on about different investment options that are in line with your time horizon and risk tolerance. Think about how long you really want to work and make sure you communicate that. The more you let a financial professional know what your time frame is, the better she will be able to assist you in a customized approach to reaching your financial goals.
Q: What are some of the best ways women can leverage working with a financial advisor throughout their life?
Martuscelli: The best time to engage a financial professional is early in your career if you can. After that, meet with them regularly — monthly, quarterly, or annually — to discuss your overall financial plan. If there’s a shift in your financial goals, like starting a family or a new business, bring them into the conversation so they can provide financial advice as you move through these life changes.
“Your own financial education will go a long way in helping you make decisions unique to your needs and aspirations.”