The Truth About Women and Money

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Ladies, brace yourselves for some bitter truths. Statistics show women will be single for part of their retirement. More than 50 per cent of marriages end in divorce, not to mention the fact that women live longer than men and are usually younger than their spouses. All these facts motivated our finance expert Rubina Ahmed-Haq to make a list of financial truths that women should know. But don't worry, she's got lots of great advice to go along with each hard truth.

[womenandmoney]

Women executives have finally started getting equal pay to their male counterparts.

False! The fact is even North America's best paid women don't get equal pay compared to their male counterparts. Standard & Poor's data (2012) on best-paid executives shows that female high-achievers still earn 18 per cent less than men. Women often face a more interrupted career path as they take time off to raise kids or take care of elderly parents. It can be intimidating in this situation to ask for more money from your employer.

Advice: Women can ask for more and should! Nobody will do it for you. If not a higher salary, maybe more vacation days, opportunities to work from home or free childcare. All of this is going to put more money back in your pocket.

When it comes to saving, put your kids' education before retirement.

False! Your kids will have more financial options when they enter university than you will when you turn 65. You can't borrow for your retirement.  Even worse, by not saving you may simply increase the likelihood your children will have to support you later in life.

Advice: Mother's always put their kids first, but when it comes to long term savings, retirement should be the priority, even if that means sacrificing putting money into a child's education fund.

Women make for better investors than men.

True! Women take fewer risks and are more organized. Men are less likely to ask for advice and are more concerned with beating their rivals, according to a report by a tax and advisory firm. Women are detail oriented and more likely to watch their in vestments closely compared to men.

Advice: Although, this is a good habit, overanalyzing your portfolio can lead to emotional decisions and in the long term a loss on profits. Women need to take a buy-and-hold approach to investing so they can see their investments grow. Rather than trying to control the results every step of the way, it's better to make sound financial decisions in the beginning that will pay off in the end. As a rule, always put away at least 10 per cent of your after-tax income into your long term savings.

As women move into the workforce their time spent doing grocery shopping decreases.

False! A report by global market researcher GfK Custom Research North America says women dominate the grocery store. Two thirds of women handle the grocery shopping. Women are in charge of a large portion of the household budget. Groceries, home décor, vacations, and children's necessities are all usually chosen and purchased by women.

Advice: Retailers know this and target women with savvy marketing. Anything from ads on TV at 4 p.m. pushing takeout to cleaning products that claim to save hours of time. Be aware of how aggressively you're being targeted and make decisions based on your needs not the wants imposed by companies. Awareness is a powerful tool for women.  

If you were to pay a stay-at-home mom by the hour she would make a six figure salary.

True! Salary.com's annual "how much is your mom worth" report says a stay-at-home mom works an average of 94 hours a week and would collect a "mom salary" of $113,586 a year.

Advice: But you're not really getting paid so women should bargain from that point of view with their spouse. Women who stay home to raise their kids are at the biggest risk of not having adequate savings and access to their own money. Raising kids is hard work but it does not bring you a paycheck. Stay-at-home moms need to have an arrangement with their spouses for a savings and retirement plan. The money should always belong to you and be sufficient if you decide to go your separate ways. But together it should complement the future you both want to have.

 

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