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Women are givers by nature—especially when it comes to our financial priorities. We may delay getting dental work to buy back-to-school clothes. Or, put our career on hold to raise children and care for aging parents. And we often help pay for our kids’ (and sometimes grandkids’) college tuition at the expense of our own retirement savings.
Such choices may be selfless, but they also put women in a precarious financial position.
“Women are trained to look out for others,” said Ginita Wall, a tax accountant, financial professional, and co-founder of the Women’s Institute for Financial Education, a San Diego, California-based nonprofit. “That’s not to say men don’t have the instinct to care for their families because they do, but they tend to take a more macro view, while women look more at the micro — at what needs to get done today or this week.”
Wall recalls one client who came to her in her early 60s and wanted to be sure that she was going to be set for retirement.
“We reviewed her financial plan and determined that she should be able to retire on time at age 66, but two years later she told me she didn’t have any money at all,” said Wall, in an interview. The client revealed that her daughter had been engaged in a nasty custody battle and that she had helped pay for all her legal fees.
“It devastated her own retirement plan and now she won’t be able to retire even close to on time,” said Wall, who focuses on financial advice for women. “Mothers want to make their children happy and relieve their pain, but you can’t help your family unless you first take care of yourself.” (Related: Establishing financial goals)
To that end, as Women’s Equality Day approaches, here are five reasons why the ladies should make their money a top priority…
Women and finance: Break the cycle
Apart from the sentiment to support their family, women often sacrifice their own financial well-being because that’s the behavior their own mothers modeled, said Wall.
“Your financial decisions today are setting an example for your kids and future generations,” she said. “Parents often think about influencing their younger children, but they forget that adult children need guidance, too. Show them what to do and break the cycle.”
Don’t give your son money for a down payment on a first home, for example, if it compromises your ability to retire on time or with the lifestyle you envisioned. And, don’t bail your daughter out of credit card debt if it won’t do either of you any good.
Instead, make clear that you’re not in the position to provide financial resources, but lend your verbal and emotional support. It’s not a rejection. It’s a learning opportunity. Help them research loan options, develop a savings plan, and explore debt repayment options to empower your children to meet their financial goals today and develop healthy spending habits for tomorrow.
Self-reliance is a gift
While many parents worry about leaving a financial legacy for their kids, financial professionals say the best gift you can give the next generation is to fortify your retirement nest egg so you can cover your own living expenses and future health care costs.
According to Fidelity’s annual Heath Care Cost Estimate, the average 65-year old couple retiring in 2023 with traditional Medicare insurance coverage can expect to spend $315,000 in out-of-pocket health care and medical costs throughout retirement. That does not include any costs incurred for long-term care or assisted living.1
What good does it do your kids, asks Cindy Hounsell, president of the Women’s Institute for Secure Retirement (WISER), if you use your paychecks to ease their financial woes, but then outlive your savings? (Related: Weaning adult children from financial support)
One or more of your kids (statistically more likely to be your daughter) might then be forced to help finance your living expenses or quit their job to become your caregiver.
“I know a mom who gave her paid-off New York City apartment to her son and his wife because she felt like they would never be able to afford to buy on their own, but now she’s moved to Florida where she’s paying rent,” said Hounsell. “She herself has been widowed a long time so there is only one Social Security check coming in for her. I know a lot of examples like this of women giving money to their kids or grandkids when they don’t really have it to give.”
Less stress
Money continues to be a leading cause of stress in America, according to a recent study from the American Psychological Association (APA), which found nearly two-thirds (66 percent) of adults identified money as a top stressor.
Generally speaking, women are more likely to be stressed about money than men.
A 2019 survey by Salary Finance, which develops financial wellness programs for employers, found that 45 percent of women from Generation X indicated they were worried about money issues most or all of the time, while 36 percent of men felt the same way. At the same time, 68 percent of millennial women said they don’t save money because they are only earning enough to get by, compared with 58 percent of millennial men who found themselves in the same situation. 3
Stress related to financial struggles can impact both psychological and physical health. Indeed, the APA report noted those who report high levels of stress about money often engage in unhealthy behaviors to manage that stress, adding that financial struggles may strain individuals’ cognitive abilities, which could perpetuate poor decision-making.
More emotionally available
Making your money and financial security a top priority yields another important benefit as well: Liberated from the weight of financial uncertainty, you restore a sense of balance that may enable you to be more emotionally available to your spouse, kids, friends, and career, said Hounsell. By nurturing yourself, you can be more present for those you love.
“If you have a plan and you know what is going to happen financially, you’re happier and less stressed,” said Hounsell. “It’s the not knowing that weighs you down.”
While no one knows every variable, like how long they’ll live or whether a layoff is imminent, you can plan for the most likely outcomes, prepare for the unexpected with an emergency fund, and protect your loved ones with adequate life insurance and disability income insurance coverage.
“You don’t know if you’re going to get sick or when you’re going to die, but we do know it will happen eventually and you have to plan for that,” said Hounsell. “You have to take your family into account. No one wants to say, ‘Sorry, I didn’t plan and now I have nothing.’”
You need more saved
Lastly, women should be more selfish with their finances because, well, they have to be.
As a gender, women typically live longer, earn less, and have less banked than their male counterparts. That makes them more vulnerable in the event of a divorce or premature death of a breadwinning-spouse.
Need proof? The Centers for Disease Control reports that U.S. females born in 2017 will live to an average age of 79.1, compared with 73.2 for men. 4
They earn roughly 84 percent of what men earn for the same job, according to a Pew Research Center analysis.5
And, while they are generally better savers and more likely to participate in a 401(k) plan at work, their lower average income means they have far less socked away for their future than most men: The average account balance for women participating in a defined contribution retirement plan in 2021 was $118,849, compared with $170,942 for men.6
Clearly, women can’t afford to put themselves last.
By declaring your own financial security as a top priority, women can not only relieve a significant source of stress, but also potentially strengthen their relationship with their spouse, family, and friends.
Oh, and happy Women’s Equality Day!
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This article was originally published in August 2017. It has been updated.
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1 Fidelity Investments, “How to plan for rising health care costs,” 2023.
2 American Psychological Association, “Stress in America,” 2022.
3 Salary Finance, “Financial Stress Weighs Heavily On Women,” May 22, 2019.
4 Centers for Disease Control, “Life Expectancy in the U.S. Dropped for the Second Year in a Row in 2021,” Aug. 31, 2022.
5 Pew Research Center, “Gender pay gap in U.S. held steady in 2020,” May 25, 2021.
6 Vanguard, “How America Saves,” 2019.