Financial Tips for This Women’s History Month

by Shawn L. Bernhard, CFP®

March is Women’s History Month, celebrating the amazing contributions women have made through the years. The U.S. Small Business Administration estimates women in Arizona make up about 46% of workers and own more than 45% of businesses. Other estimates from Merchant Maverick’s Top States for Women-Led Entrepreneurs rank Arizona third in the nation for women-led businesses, with over 20% of Arizona employees being led by a woman; they suggest women in our state may enjoy higher than average income over other regions and receive greater funding for their companies.

But finances, historically, may be a category where some women may not prioritize or recognize their value or worth. Additionally, life events and situations may raise barriers to the creation of wealth; women may take career breaks and have greater needs for flexibility due to childcare responsibilities. On average, women also tend to live longer than men, so their wealth-planning needs often span a longer time horizon.

However, research from UBS’s Women and Investing: Reimagining Wealth Advice has shown that while many women have often taken a back seat to their partners in making decisions about money, that reluctance is changing—68% of women surveyed say they are discussing money with their significant others more than before. Many breaking barriers are feeling good about the future; 85% of female business owners are optimistic about their businesses, according to this Investor Sentiment study.

Financial prioritization is important for any individual who wants to achieve her goals. Following are some important tips and considerations for women business owners, and women overall, as they seek to navigate finances and their futures.

  1. Prioritize the “future you”:As human beings, our time is valuable, and women – often as the primary caregivers of children, sometimes also taking care of parents – may have even less of it. But the time we spend on ourselves can be representative of how we value ourselves, and better set us up for the future. Additionally, with pay discrepancy sometimes an issue, taking a career break, or seeking work flexibility, women may earn less money to invest and grow, making smart planning and investments all the more important. Prioritize your finances and make important money moves at various stages of life. Building a budget and identifying financial goals for upcoming life intervals is a form of self-care that can produce positive ripples across your career and life, offering confidence today and more flexibility in the future.
  2. Talk about money with your partner:While dividing responsibilities can be effective in coordinating things like household tasks, assigning financial decisions to one partner can cause the other to be less confident in financial knowledge. Not only can lack of financial participation result in increased marital stress—with money a major source of friction in many relationships—it also has consequences for spouses that outlive their partners or marriages that end in divorce.

When one partner is excluded from financial decisions, their understanding of the family’s finances—and skills required to make smart choices—fade, and they risk having to catch up during a period that may already be emotionally challenging. If you are not already doing it, set a date to have important money conversations with your partner and consider working with a financial advisor to navigate them.

  1. Know your investment risk tolerance: Studies support that women may be more reluctant to take financial risks than men. This can be seen in many women’s pension allocations, which often favor bonds versus equities. And women may be more measured overall in their financial investments, with 3% comfortable in taking risks to achieve a good return, compared with 26% of men, according to a Nutmeg Another survey suggests that while men may prefer asset classes such as stocks for long-term investments, many women prefer real estate. Identify and consider your personal risk tolerances and discuss this with your partner to see if you are both on the same page.
  2. Know your finances and create a plan: Identify your priorities and how you can pursue the life you want. Start by considering your goals and establishing an overview of your current cash flow needs to determine a structure. Take the time to identify what you want to achieve by considering the big picture first:
    • What do I want to accomplish in life?
    • Who are the people that matter most to me?
    • What are my main concerns?
    • How do I plan to achieve my life’s vision?
    • What do I want to leave as my legacy?

Next, consider the specifics:

    • What are my immediate needs? Consider what you need to cover 3–5 years’ worth of expenses and to weather uncertainty.
    • What are my longer-term objectives? This should include your longer term, 5+ years’ of expenses, including healthcare and long-term care costs
    • What do I wish to leave as my legacy? Consider what you want to leave to your children and grandchildren, as well as to charities or causes you care about.

In particular, consider the following.

  1. Seek liquidity: Do you have enough cash to withstand a storm? Consider stable/safer assets (like cash and short-term bonds) to cover spending for long enough to get through a personal or market crisis (as the Covid-19 pandemic recently taught us all), as well as the capital you plan to invest over the next few years. This strategy can help take emotion out of investing by giving you a clearer understanding of your current needs and preventing you from selling when the market has suffered losses. If you’ve set aside enough to cover short-term spending needs, there should likely be no need to sell equities.
  2. Look ahead: Plan for a long life; the average life expectancy for women in Arizona is greater than 81 years and over 76 years for men. Lifetime age disparity and other circumstances can affect women ́s financial requirements and the need to address pension gaps. You might consider holding assets earmarked for longer-term spending for when the market, most likely, will have recovered—for capital appreciation. Consider staying invested for the long term, diversifying across different types of assets and geographies, and regularly rebalancing.
  3. Make an Impact – Consider how you wish to leave your mark. A legacy portfolio should typically be less focused on day-to-day volatility. It should be intended to grow over years or decades. As a result, in working with an advisor, you can choose strategies that are focused on the longer-term and that can also offer after-tax performance.

The future is bright for women in Arizona. What do you want to achieve? Plan for the financials and everything else should follow.

Shawn L. Bernhard, CFP® is Market Director for Arizona, UBS Financial Services Inc. a subsidiary of UBS AG. Member FINRA/SIPC in Phoenix. She has over 20 years of wealth management experience, including advising clients, coaching, and managing financial advisors.

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc. Neither UBS Financial Services Inc. nor its employees (including its Financial Advisors) provide tax or legal advice. You should consult with your legal counsel and/or your accountant or tax professional regarding the legal or tax implications of a particular suggestion, strategy or investment, including any estate planning strategies, before you invest or implement.. Asset allocation and diversification strategies do not guarantee profit and may not protect against loss.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the U.S.

Speak Your Mind

In Business Dailies

Sign up for a complimentary year of In Business Dailies with a bonus Digital Subscription of In Business Magazine delivered to your inbox each month!

  • Get the day’s Top Stories
  • Relevant In-depth Articles
  • Daily Offers
  • Coming Events