Ladies: Are You Thinking Enough About Building Assets?

by Miranda Marquit · 0 comments

One of the issues that has been on the minds of many financial experts lately has been the gender gap when it comes to finances. There is a gender gap in terms of who handles the finances in various households, and what sorts of money management styles are evident.

Many studies find that men and women tend to engage in different money behaviors, and that could mean problems for women down the road.

Women Aren’t Building Their Assets

“Women tend to focus on the household expenses and maximizing savings on their purchases,” says Priya Haji, the CEO of SaveUp. “While this is certainly important, women need to also think about the balance sheets of their households. How are they building assets?”

Haji points to the results of a recent survey conducted by SaveUp. In the company’s U.S. Consumer Savings and Debt Report, SaveUp found that women have on average, more than $11,000 less in their 401(k)s and about $3,500 less in their IRAs than men do. Men also have much larger taxable investment accounts and liquid savings accounts.

All of this points to the fact that women aren’t building their financial assets. This can be problematic for women, since it puts them in positions where they might fall behind later in life. Women are more likely to live longer, and that means that they are likely to need more assets over their lifetimes.

How to Invest More In Your Future

If you are a woman (or anyone, really), it makes sense for you to invest more in your future. The SaveUp report points out that men are more likely to take more risks. Indeed, their investment accounts are larger, but women have larger money market accounts. Unfortunately, the wealth-building power of a money market account is much less than other types of investment accounts.

In order to make up for the financial gender gap, women need to start focusing on other things. “Not just simple savings a CDs, which women do well with, but moving into risk adjusted investment vehicles like their 401(k) allocations for retirement, or simple investment vehicles that benefit from market gains,” says Haji.

You don’t necessarily have to run out and get a job (especially if you don’t want to work outside the home), but there are somethings you can do to improve your financial outlook. You can learn more about investing, and take steps to invest more. Index funds are great places to start, since they offer exposure to stocks (which have the potential for higher rates of return) and they follow market performances, so it’s not as risky as stock picking.

If you don’t have access to a retirement plan through work, it’s still possible to open an IRA, and have a spouse make contributions. This makes sense, since it can boost the amount you invest as a couple, and it also provides you with at least some way to build assets even as you stay at home and manage the family.

It’s also possible to start a side gig from home, or find some other way to make a little extra so that you aren’t stuck without assets if something happens to your significant other.

Bonus Tip:

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