How Women Can Approach Wealth Management with Confidence

How Women Can Approach Wealth Management with Confidence

The traditional model of household finances being managed primarily by men is being replaced by a new, more equitable model. Increasingly, women are taking on the role of household CFO, with 59% of women in couples saying they are in charge of making household financial decisions in a 2024 GOBankingRates survey — a marked increase from the 48% who said the same in 2023. An additional 31% said they make decisions in collaboration with their partners.

There’s an upward trend in women managing long-term finances as well: As baby boomers, who hold roughly 51% of the nation’s wealth, are aging, women are taking over much of the responsibility for that wealth. Many younger women are managing wealth, too, for their own retirement and other life goals.

Unfortunately, women tend to have less of their own money to manage than their male counterparts do. In fact, women’s accumulated wealth by retirement age is only about 74% that of men. Here are some reasons for the disparity in lifetime earnings:

Wage inequality. In 2024, women earned 85% of what men earned, according to a recent Pew Research Center analysis of median hourly earnings of full- and part-time workers. While the earnings gap has historically tended to be smaller for workers ages 25 to 34 — this held true in 2024, as women 25 to 34 earned 95% of what their male counterparts earned — the gap tends to widen as workers age. And while the gender pay gap is moving toward parity, that movement has been gradual, with the gap shrinking just 4% since 2003.

Limited career trajectories. Women continue to be underrepresented in management and C-suite positions, according to the Women in the Workplace 2024 report by McKinsey & Company. Although some progress toward parity has taken place over the past decade, women filled just 29% of C-suite roles, 28% of senior vice president roles and 34% of vice president roles in 2024.

Unpaid care work. Women are more likely than men to take time away from work to care for children, elderly relatives and family members with disabilities. Notably, a study by the Institute for Work & Health found women were 73% more likely than men to permanently leave their job to care for an elderly family member. These career disruptions can result in not only short-term income reductions but also missed opportunities as progress toward promotions is put on hold.

How to Gain a Stronger Financial Advantage

Lower lifetime earnings may leave women with less wealth to invest for the future, but smart management can help them make the most of it. If you are a woman seeking to grow your wealth and manage it wisely, these tips may help.

Build your knowledge and confidence. The more you know about your financial situation and investment options, the more confident and competent you will be in managing your wealth. Start by taking stock of all your assets, from retirement, investment and savings accounts to property and other possessions so you know exactly where you stand.

Then, if you don’t feel as financially savvy as you’d like, do some self-study about saving, investing, money management — any area you think might be helpful. Organizations including the Women’s Institute for Financial Education and the Financial Literacy Organization for Women and Girls offer valuable resources, workshops and seminars to support women’s financial journeys.

Leverage available resources. Managing your wealth doesn’t necessitate becoming a financial whiz yourself. There are plenty of professionals available to help you achieve your goals. A wealth advisor, banker, accountant or any combination of these could be an invaluable resource for your journey.

Set goals. Setting short-term (six months to five years), medium (five to 10 years) and long-term (10+ years) goals can help you build your wealth and plan for your future. Depending on what stage of life you’re in, your goals may include anything from budgeting, saving, paying off debt and making large purchases (home, education, etc.) to retirement planning, wealth accumulation and legacy planning. Keep your goals realistic and give yourself credit for small achievements along the way; that will keep you motivated to continue.

Develop a plan for achieving your goals. Your financial plan should cover all aspects of your financial picture: your goals, savings, emergency fund, expenses, debt, insurance coverage, investments, tax considerations, estate planning, etc. You may choose to work with a financial planner to ensure your plan is comprehensive, or consult with online resources to build and maintain your plan yourself. Either way, check in on your financial plan at least annually to ensure you’re staying on track. Make adjustments as you go and as your life circumstances evolve.

Empowering yourself with knowledge and resources will give you the confidence to achieve your goals as you successfully manage your wealth.