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7 steps to women's financial empowerment

Shelly  Gigante

Posted on July 19, 2022

Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
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This article will...

Highlight the biggest challenges women face on the road to financial security.

Explain why women should trust their instincts more when it comes to investing.

Reveal the ideal debt-to-income ratio and teach you how to stick to it. 

It’s been 100 years since ratification of the 19th Amendment granted women the right to vote — the celebrated milestone in American history that empowered women and promoted gender equality throughout the political process for the first time. Great strides have been made since 1920. Women today outnumber men on college campuses and are getting better job opportunities in the labor market. On the home front, there is more equitable distribution of household responsibilities — especially among younger generations.1

But the effort continues. Indeed, the spirit of the early suffragists, including Susan B. Anthony and Elizabeth Cady Stanton, still serves as a North Star for modern-day advocates who fight for better boardroom representation and pay parity.

Higher incomes and positions of power, however, are but half the battle. To secure their financial futures, advocates say women today must develop a proactive plan to save, spend, and invest with intent.

Financial empowerment for women has long been a point of emphasis for MassMutual and its financial professionals. MassMutual has made it not only a priority within the company (as our board composition and family-friendly employment policies demonstrate ), but also part of the Live Mutual philosophy with which the company approaches helping people secure their future and protect the ones they love. (Related: A mathematics and suffrage pioneer's time at MassMutual)

Financial empowerment is not a measure of net worth. It really just means having the confidence — and skill set — to control your money versus letting your money control you.

For women, who on average have far less financial security than men, financial empowerment is a game changer. Just 15 percent of women who are already retired or planning to retire within 15 years and still participating in their employer’s retirement plan indicated that they are “very knowledgeable about managing their savings and investments,” according to a MassMutual Women's Retirement Risk Study. Female respondents also are less familiar with certain investment types and less likely to be active in the management of their finances than their male counterparts.

Gaining the confidence to manage their money well can help to mitigate the financial obstacles that many women still face:

  • Women outlive men by an average of five years, which means they need their savings to last longer.2
  • Despite their higher savings rate and higher participation rate in workplace retirement plans, they earn less during their working years than men, which leaves them with smaller average 401(k) account balances.3,4

“Women need to become more financially empowered because things are going to happen along the road of life,” said Cindy Hounsell, president of the Women’s Institute for a Secure Retirement (WISER). “It’s not a straight path to retirement. You need to plan and be prepared for anything.”

To that end, MassMutual has developed the following seven recommendations for giving women the tools they need to take command of their financial future and establish financial empowerment.

1. Get financially literate

Education is everything. To manage your money well, you need a basic understanding of the principles of budgeting, borrowing, and investing. Online resources abound that can help you improve your financial literacy. At a minimum, you should learn how interest rates affect the cost of borrowing, how compounded growth can help you build wealth, and what a balanced investment portfolio of stocks, bonds, and mutual funds looks like. (Learn more: Understanding the basics of investing)

On average women are less confident than men at handling investments, yet research suggests that they should trust their instincts. Studies show that women are better savers, they maintain more diversified portfolios (which helps them weather market volatility), and they’re less likely to make costly knee-jerk reactions in response to market downturns than men, which often results in higher returns.5,6

2. Talk money

Getting your financial house in order is a big job, one made infinitely easier when you have someone in your corner. A trusted financial professional can help you create a financial plan and investment strategy that is appropriate for your age, goals, and risk tolerance. Ask questions often and meet regularly, or whenever you experience a change in family status or household income, to amend your plan as needed.

If you share expenses with a spouse or significant other, make money part of the regular conversation. Discuss your financial goals and your values as you develop a plan together, which family therapists say can help strengthen your relationship. (Learn more: Sharing money in marriage: The mutual payoff)

3. Check your credit score

If you don’t already know your credit score, find out. Your credit score, which is based primarily on your prior payment history and the amount of debt you owe, is used by lenders to determine how much to charge you for borrowing money. If your number is low, you can expect to pay a higher interest rate (potentially much higher) for things like car loans, home mortgages, and credit cards.

You can request a copy of your credit report for free through the three credit reporting bureaus Experian, TransUnion, or Equifax . And if you find your score is low, take steps now to raise it by paying bills on time, paying off debt, keeping credit card balances low, and correcting any inaccuracies you may find on your report. (Learn more: How improving your credit score helps you)

4. Dump that debt

Americans are good at living beyond their means. Very good. On average, U.S. households with at least one credit card carry a balance of nearly $5,315, according to Consider trying to keep your debt-to-income ratio (including all expenses) to no more than 36 percent, the ideal ratio according to many lenders. If you carry a balance on multiple credit cards, financial professionals suggest paying as much as you can toward the credit card with the highest interest rate each month, while continuing to make the minimum payment on your other credit cards. When the first card is paid off, move on to the next highest interest rate card until you are debt free.

Not all debt is bad, of course. Mortgage loans and student loans, which are tied to a potentially appreciating asset, are generally considered to be “good debt,” while high interest credit card balances are generally considered to be bad. The name of the game is balance. (Learn more: Managing debt in a balanced way)

5. Plan for retirement

To retire on time with enough money to cover your bills, you’ll need to get serious about saving now. First, determine how much you need to save to maintain your lifestyle during retirement and start making contributions to your workplace retirement account. If you can’t max out your 401(k), at least contribute enough to claim the employer match. (Calculator: How much should I save for retirement?

While the amount you need saved may look daunting, don’t forget that it’s never too late to save. And, if you fall short of your savings goal, you can always work a few extra years, downsize your living expenses to stretch your money further, start a side business for supplemental income, or invest more aggressively for a potentially higher return (although that carries with it higher risk). Here again, a financial professional can be instrumental in helping you reach your retirement goals. (Learn more: Retirement savings catch up: 3 moves)

6. Social Security

You should also find out what you can expect to collect from Social Security during retirement—and understand that even in the best scenario, it may not be enough to support you without supplemental retirement savings.

Statistically, most women outlive their spouses, which has enormous implications for financial security. The surviving spouse is more likely to incur the cost of assisted living or nursing homes, yet they are also forced to live on less income when their spouse’s Social Security checks stop. Surviving spouses entitled to Social Security are able to collect their own Social Security benefit or a survivor’s benefit based on a percentage of their deceased spouse’s earnings record. However, that can still amount to a 50 percent drop in monthly household income. (Learn more: A financial checklist for widows and widowers) 

Hounsell said married women, especially those planning for retirement, should contact the Social Security Administration to find out how much they would be entitled to.

7. Establish an emergency fund

You can’t break the cycle of living paycheck to paycheck without an emergency fund. Most experts recommend setting three to six months’ worth of living expenses (not income) aside in a liquid, interest-bearing account, such as a savings or money market account. An emergency fund ensures that you don’t derail your savings plan or rack up high interest credit card debt in the event of an unforeseen job loss or medical emergency. Emergency funds are also important for retirees, providing the cash cushion needed to pay the bills during times of market downturns, giving their portfolios time to recover. (Learn more: Emergency fund basics)

A lack of financial control can be paralyzing regardless of age or gender. Women, in particular, can empower themselves to manage their money effectively and build wealth by focusing on financial literacy, paying down debt, creating an emergency fund, and saving for retirement.

Discover more from MassMutual…

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Retirement planning: What women do right

Need a financial professional? Find one here

This article was originally published in March 2020. It has been updated.


1 Pew Research Center, “U.S. Women near milestone in the college-educated labor force,” June 20, 2019.

2 Centers for Disease Control, “Vital Statistics Rapid Release Provisional Life Expectancy Estimates for 2020,” July 2021.

3 Pew Research Center, “The narrowing, but persistent, gender gap in pay,” March 22, 2019.

4 Vanguard, “How America Saves,” June 11, 2019.

5 Fidelity Investments, “2021 Women and Investing Study.” .

6 Fidelity Investments, “2021 Women and Investing Study.”

7, “Key Figures Behind America’s Consumer Debt,” May 13, 2021.

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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.