{"id":3974,"date":"2014-07-25T06:24:01","date_gmt":"2014-07-25T10:24:01","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=3974"},"modified":"2014-07-25T06:24:01","modified_gmt":"2014-07-25T10:24:01","slug":"what-is-it-with-women-and-financial-literacy","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=3974","title":{"rendered":"What is It With Women and Financial Literacy?"},"content":{"rendered":"
\"next-ave\"<\/a>Drumroll, please. Prudential\u2019s eighth biennial study on the\u00a0Financial Experience & Behaviors Among Women<\/em><\/a>\u00a0was unveiled today and the news is this: Women feel no more prepared to make wise financial decisions today than they did two years ago \u2014 or even a\u00a0decade\u00a0<\/em>ago.<\/span><\/span><\/span>Nor has their understanding of financial and insurance products improved. Not surprisingly, the \u201cConfidence Gap\u201d (the measure of women’s confidence in their ability to attain their financial goals) has not improved over that 10-year span either, according to the disheartening findings.<\/p>\n

While 75 percent of the 1,407 American women (age 25 to 68) polled said having enough money to maintain their lifestyle throughout retirement was very important, only 14 percent were very confident they will meet that goal. And just 20 percent said they felt prepared to make smart money moves.<\/p>\n

Very Discouraging NewsMy head hit the desk.<\/p>\n

What is it with women and financial literacy?<\/p>\n<\/div>\n

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Read column on Forbes<\/strong><\/a><\/div>\n

\nWives are increasingly the\u00a0breadwinners<\/a>\u00a0in their households (nearly half of the women surveyed) and the women surveyed said they adroitly direct their day-to-day money transactions. About a third gave themselves an \u201cA\u201d for their knowledge of managing money (33 percent) and debt (29 percent). Most gave themselves a nothing-to-sneeze-at B or B-.<\/span><\/span>(MORE<\/strong>:\u00a0Hopeful Money News About Boomer Couples<\/a>)Although I was pleased that Prudential found boomer women were twice as likely to feel on track or ahead of schedule for financial and retirement planning as Gen X women and Millennials (46 percent vs. 26 and 27 percent respectively), their showing was still pretty pathetic.Women Throw Up Their Hands<\/strong><\/p>\n

The basic takeaway, though, is that women, on the whole, still throw their hands up when it comes to making long-term financial decisions about saving and investing. For example, only 41 percent of women said they understand stocks and bonds well compared to 56 percent of men.<\/p>\n

(MORE<\/strong>:\u00a0Shrewd Money Advice for Women Over 50<\/a>)<\/p>\n

\u201cWomen don\u2019t feel prepared to make wise decisions and are not sure what to consider when evaluating their options. They don\u2019t seem to be taking action either,\u201d said Lori Dickerson Fouch\u00e9, Chief Executive Officer, Prudential Group Insurance, at a media briefing about the study.<\/p>\n

That inertia will have serious implications for them.<\/p>\n

Prudential\u2019s findings aren\u2019t groundbreaking, but they\u2019re one more slap in the face that women are just not getting it.<\/p>\n

In her recent New York Times article,\u00a0Women to Wall Street: Are You Listening?<\/em><\/a>, M.P. Dunleavey wrote that \u201cmany women are struggling to feel in control of their finances, given certain hurdles of their own. (Knowledge gaps + anxiety = shame.) Seventy-seven percent of women want to be involved in day-to-day investment decisions, a\u00a0Merrill Lynch study<\/a>\u00a0found last fall, yet 72 percent say they \u2018know less than the average investor\u2019 about investing in general.\u201d<\/p>\n

Here are four of the Prudential survey\u2019s findings that caught my eye, along with my advice for women concerning them:<\/p>\n

1. Women said they have a lack of funds to invest.<\/strong>\u00a0They felt one of their biggest barriers to reaching their long-term financial goals was not having enough disposable income to put toward them; 31 percent called this their top financial planning hurdle.<\/p>\n

My advice<\/em>: It doesn\u2019t take much dough to get started. You can set up an\u00a0automatic investment<\/a>program between your checking account and an index fund (of the broad stock market) with as little as $50 a month. Many no-load funds will waive or lower their minimum initial investment if you sign up for this kind of ongoing plan.<\/p>\n

Once you take this action, your investing confidence will begin to grow. Try it.<\/p>\n

2. Women are failing to use online money-management tools and calculators.\u00a0<\/strong>Only 18 percent of boomer women surveyed said they take advantage of these on a regular basis.<\/p>\n

My advice:<\/em>\u00a0You can do better. Dive into the electronic arena to bone up on investing.\u00a0Online tools<\/a>\u00a0are a great way to learn and to save time dealing with your financial life.<\/p>\n

There\u2019s lots of help available on the Internet, such as The National Endowment for Financial Education\u2019s site,\u00a0Smartaboutmoney.org<\/a>, which has free guides that explain stocks, bonds and mutual funds. (Next Avenue<\/a>\u00a0has helpful articles from this group, too.)<\/p>\n

Other general money sites I suggest you visit are\u00a0Daily Worth<\/a>\u00a0and\u00a0LearnVest<\/a>. Another site I recommend for women is\u00a0WISER<\/a>, operated by the nonprofit Women\u2019s Institute for a Secure Retirement. Check out its\u00a0Investment 101<\/a>\u00a0tutorial.<\/p>\n

3. Women have a lack of familiarity with financial products and industry jargon<\/strong>. This isn’t rocket science. And the truth is there are so many resources out there to help you get educated.<\/p>\n

My advice:\u00a0<\/em>Your employer\u2019s resources are a good place to start. Many companies and nonprofits offer workplace education and planning tools; some even underwrite lunch-and-learn sessions or bring in outside financial advisers to give talks.<\/p>\n

Tap into your social media accounts, too, for money-management articles and insights. I was pleased to see in the Prudential study that women are beginning to see social media as a financial research tool; 12 percent said they use the sites for that purpose.<\/p>\n

When asked which social media sites they\u2019d trust most to learn about financial issues or products or to evaluate financial companies, Facebook won the most votes from boomer women (31 percent), followed by LinkedIn, YouTube and Twitter.<\/p>\n

4. Women feel financial advisers don\u2019t \u201cget\u201d them.\u00a0<\/strong>Only one in five women surveyed believed the\u00a0financial services industry<\/a>\u00a0truly understands their needs (the same percentage as men, interestingly).<\/p>\n

Little wonder, then, that just 31 percent of women surveyed use a financial professional, down markedly from 48 percent in 2008. “It’s shocking, surprising and admittedly disappointing,” said Dickerson Fouch\u00e9.<\/p>\n

The numbers, I\u2019m glad to say, were better for boomer women: 45 percent of them said they use a financial professional.<\/p>\n

Some women surveyed don\u2019t work with money pros, however, because they feel they don\u2019t have sufficient assets or the advisers\u2019 fees are too high.<\/p>\n

\u201cThere’s a big misconception that you have to have certain amount of assets or income, or \u2018I\u2019ll have to pay a huge price to hire a financial adviser,\u2019 said Lynnette Khalfani-Cox (\u201cThe Money Coach\u201d) at Prudential\u2019s panel discussion. \u201cI tell people you can\u2019t afford\u00a0not<\/em>\u00a0to have a financial adviser.\u201d<\/p>\n

My advice:<\/em>\u00a0Stop making excuses for not working with a financial adviser. Some do take middle-income clients and have reasonable fees.<\/p>\n

Interview a few (there are searchable databases at sites of the\u00a0National Association of Personal Financial Advisors<\/a>, the\u00a0Financial Planning Association<\/a>\u00a0and the\u00a0Certified Financial Planner Board of Standards<\/a>),\u2028 find one you like and then don\u2019t be shy about asking the questions you need to make sense of it all.<\/p>\n

You\u2019re accountable for your own financial future. Take ownership.<\/p>\n<\/div>\n

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posted by\u00a0Kerry Hannon<\/a>, July 16, 2014\u00a0More by this author<\/a><\/p>\n

\"Woman<\/p>\n

Kerry Hannon has spent more than 25 years covering personal finance for Forbes, Money, U.S. News & World Report and USA Today. Her website is\u00a0kerryhannon.com<\/a>. Follow her on Twitter\u00a0@kerryhannon<\/a>.<\/p>\n

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