Women & Finance: Biggest Financial Regrets

Women & Finance: Biggest Financial Regrets

June 29, 2021
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The No. 1 financial regret among women is that they haven’t invested more, according to a new report from Bank of America - Merrill Lynch

Today, women’s lifelong financial wellness is at a tipping point. Thanks to a shift toward women’s growing personal and financial power, they are poised to move into true financial independence. … Yet there is still a trail left to blaze. Women are living longer than ever before, and funding that longevity has truly become an issue.
The number one regret among women (named by 41% of those in the study) is that they aren’t investing more, which means they aren’t taking full advantage of investments that provide the opportunity for [them] to grow their wealth in ways that income alone does not.

59% of the respondents said they weren’t doing a good enough job using investing as a way to pursue their financial goals. A full 60% said that a lack of investing knowledge was their primary barrier, while 34% of them said they didn’t have the confidence to invest. Among those women who do invest, however, 77% said they felt they would be able to save enough money to last them the rest of their lives.

Despite the talk about improving financial education for the next generation, younger women are still coming up short. Only 46% of millennial women are confident in investing compared to older generations. Confidence in investing is not just about experience, but, also exposure.

While not investing enough is a top financial regret for women, it is not their only regret. Women also report that they wish they had chosen a career with higher pay, not taken on as much credit card debt and lived within or below their means.

Nearly a third of women in the survey (31%) said they regretted not living below or within their means. This is true for women of all races and ethnicities.

48% of Asian women, 41% of African-American women, 40% of Caucasian women and 40% of Latinas reported that their biggest financial regret was not investing more of their money. The second largest financial regret for African-American and Asian women was not choosing a career with higher pay, and the second largest regret for Caucasian and Latina women was that they had taken on too much credit card debt.

A major contributing factor to the wealth gap is the gender pay gap. For every $1 a man makes, a woman in a similar position earns .82 cents. Women of color face even greater disparities—African-American and Latina women earn .70 cents and .64 cents on the dollar, respectively.

But that’s only part of the story: The pay gap only considers what women are now earning compared to men. It fails to demonstrate how the pay gap accumulates and compounds over the course of a woman’s life.

Work disruptions and interruptions—often triggered by the need to care for children, parents and spouses—affect a woman’s potential earnings over her lifetime. These gaps become relatively impossible to make up and reach parity with men, who do not take time away from the workforce to provide care.

When a woman reaches retirement age, she may have earned a cumulative $1,055,000 less than a man who has stayed continuously in the workforce.

In addition, because Social Security is calculated on a woman’s 35 highest earning years and women are twice as likely as men to have at least one zero-earning year count toward their Social Security, women on average receive $4,000 less annually than men in Social Security benefits.

It’s critical to break the taboos about the subject of money: be open and willing to discuss and get educated about finance, encourage other women to seek professional financial advice and plan early and often for longer, wealthier lives.

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Gowdy Financial Group, LLC., is a Fee-Only, Financial Advisory firm dedicated to helping women, from all backgrounds and income levels, get out of debt, save toward your goals and enjoy the freedom that comes with being in control of your money. We don't sell products; we provide solutions. "Your Goals. Our Solutions." Serving Clients Nationwide.