3 ways women can take charge of their financial future

Women, money and influence

Janet Yellen made history in January when she became the first woman to serve as U.S. treasury secretary. She will play a critical and highly visible role in the country’s financial and monetary matters.

Yellen’s economic leadership comes at a time when women are increasingly taking charge of their money, and have more money and power than ever before. According to McKinsey & Co., women in the U.S. are set to inherit an estimated $30 trillion from aging parents or spouses by 2030.1

However, while many women are comfortable in the financial driver’s seat, on the whole, they don’t engage with their finances as much as men. A 2020 U.S. Bank Women and Wealth Insights Study shows that more women than men associate financial planning with stress and anxiety.2 Women are also less comfortable making retirement and investment decisions, and they exhibit lower levels of financial literacy compared with men, according to a 2020 Federal Reserve survey.3

Part of that gap is due to generational differences. Millennial women, who may have grown up with different cultural views of gender equality and more female role models, are more engaged with and confident in their ability to manage their finances than women in older generations. In fact, 56 percent of women under the age of 35 reported feeling confident in their ability to manage their personal finances, compared with 50 percent of women between 35 and 54 and 41 percent of women age 55 and older, according to the U.S. Bank survey.2

3 steps to achieving financial empowerment

Financial confidence in women is growing steadily due to societal changes, but there are still ways women can engage more with their finances. Some women may not see themselves reflected in the financial industry, whether as customers or service providers. Others have not been exposed to sufficient formal or informal financial education. And regardless of gender, those who haven’t been empowered to start financial planning may find the process daunting at first.

Here are three actions women can take to become more engaged and feel more financially empowered.

  1. Choose a trusted financial advisor. U.S. Bank survey respondents who said they were the most confident in managing their finances were also more likely to seek the advice of experts to make important financial decisions. Nearly half of all women surveyed (49 percent) said they seek out the experts to make important financial decisions, and an equal number said having a personal relationship with their advisor is important.2 Feeling comfortable with an advisors’ credentials is important too, so it’s important to ask questions about their fiduciary status, how they’re paid, how they communicate and in which financial services they specialize.
  2. Develop a plan that fits your financial objectives. One-third of women surveyed by U.S. Bank said they have a strong financial plan that guides them, and 37 percent reported having clearly defined financial goals.2 Everyone has different financial planning needs based on their own unique circumstances and objectives. A 25-year-old woman may be focused on saving to buy a home and starting a 401(k), whereas a 35-year-old woman may want to prioritize a child’s college savings plan. A good financial advisor can help you create a financial plan that suits your specific needs, adjusting them as your goals evolve over time.
  3. Take advantage of financial literacy resources. There are numerous financial tools and resources available, including budgeting apps, investment programs or podcasts, and online articles, videos and other content. Even simple steps like having a conversation with friends can help raise your comfort level. Both formal and informal education can be empowering.

A good financial advisor can help you create a financial plan that helps you find a path to achieving your objectives.

While the U.S. Bank Women and Wealth Insights Study shows that women often have negative associations with financial planning, it also reveals that women, especially young women, are reversing that trend. In fact, women are just about as likely to use a financial advisor as men, and more women reported having long-term advisor relationships.

Having a defined plan and a set of goals helps anyone, regardless of gender, make financial decisions with confidence.

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