#Outside the Box: Women: It’s time to take control of your financial life

But there are myriad things in life that we can control. Financial literacy and educating ourselves about money and ways we can build a secure financial future for ourselves is one of those things.

That’s why the recent jobs report from the Bureau of Labor Statistics and the latest Women’s Retirement Literacy Report from The American College of Financial Services have me flustered. I will get to these shortly.

The pandemic impact on women’s financial security

For women, being knowledgeable about money is imperative in
order to navigate our lives with confidence and ride out the shocks we can’t
control.

The pandemic has proven the stark reality of this as women have left or lost jobs and promotions. A big factor in this workplace exodus: It’s often their responsibility to shoulder caregiving responsibilities in a household, whether it be for children who are in virtual school rooms at the kitchen table, or aging parents whisked from assisted care living homes when the shut-down, no-visitor isolation orders landed last spring.

Being
knowledgeable about money and how to save and invest and spend wisely has never
been more important for women. It is our lifeline.

I am an activist for women and money, as you know from my
MarketWatch columns over the past year. These include: Why
is it still so hard for women to save for retirement?, How
can women do a better job preparing for retirement? and This
is why so many women face poverty in their old age.

I regularly dole out advice on what you can and should do, and
I will dutifully tack a few of these on to the takeaway section at the end of
this column. But here’s the truth: There is little I can say, or shout, or
cajole, or show just gee how easy this is to do, if you make it a daily habit
and so on.

Because you know what? It’s not easy. And no one can do this
for you, not even the best financial adviser.

You have to suck it up and devote the time to your money
life. That will give you some control when the world goes topsy-turvy as it has
this past year. No amount of words from a columnist or an adviser will do
this for you. The motivation has to come from within to take lasting actions.

So many women I know shift into the “I’ll think about it tomorrow when I have time to focus on it” mentality. I’ve been guilty of this myself at times. We kick it down the road. We’re trying to deal with today — right now.

That’s going to bite back one day. And it will be harsh. Only
you can find the inner compass and energy to do this for you, for your life, for your future.

So here’s what’s got me swirling today. Use it or lose it, as
the expression goes, to make a difference in your life. No one cares about you
as much as you do. Fact.

“The most recent Bureau of Labor
Statistics (BLS) monthly jobs report shows that the economy lost 140,000 net
jobs in December, marking the first month of job loss since the economy started
adding back jobs in May 2020,” according to the National
Women’s Law Center, a nonprofit focused on achieving gender justice
in courts and public policy. “All of the jobs lost were women’s jobs, with
women losing 156,000 jobs and men gaining 16,000. And the overall unemployment
rate masks even higher rates for Black women and Latinas.”

Other reports I’ve
read show that women have been cutting hours, switching to less demanding jobs,
or exiting the workforce altogether because they feel it is their only choice. According
to the Census
Bureau, women are three times more likely than men to have left
their job because of child care during the pandemic.

And that loss of income today has enormous
financial repercussions not just for now, but for future retirement.

 Lagging financial literacy

Now set that scenario against these findings that landed in my in-box this week — the Women’s Retirement Literacy Report from The American College of Financial Services — the nation’s largest non-profit, accredited educational institution devoted to financial services. 

The research report shows that neither men nor women score exceptionally well on this retirement literacy quiz. A whopping 89% of women received a failing grade on the 38-question retirement literacy quiz, compared with 72% of men.

On average, for example, women scored 42% on quiz questions related to retirement savings plans while men achieve an average score of 55%. Women are less likely to have conducted a calculation or estimate of their retirement savings needs and demonstrate a lower understanding of retirement savings plans, including 401(k)s and IRAs, compared with men.

That said, it comes at a time when the state of women’s
financial planning efforts are under mounting strain as they face unequal
financial consequences from the COVID-19 pandemic, according to the
researchers.

And they’re right. More than ever, these times require
that women have a grasp of their financial picture and all that entails.

Additional
survey findings:

• Only 16% of women feel very knowledgeable about investment considerations for retirement planning, though self-reported knowledge seems to increase with age and assets.

• A slight 14% of women feel knowledgeable about strategies for sustaining income in retirement.

• Only 12% of women feel highly knowledgeable about long-term care and only 27% have a plan to fund it, despite the fact that 50% of women expect to require it.

• Four in 10 women (43%) feel less comfortable with investment risk because of the COVID-19 crisis.

• Nearly half of women rate their investment risk tolerance as conservative compared with only 3 in 10 men.

Sigh. If you’re curious about how your retirement know-how measures up, you can take the literacy quiz yourself. Click here.

As promised, here are ways to increase your financial knowledge and take control:

Pump up
your money mojo. Many employers offer workplace discussions and
planning tools; if yours does, sign up and attend these sessions.

Check out website personal finance educational offerings
including the Women’s Institute For A
Secure Retirement (WISER) website. You’ll also find investing education
primers on most financial services websites such as Vanguard, T. Rowe Price and
Fidelity.

Listen to the “Friends Talk Money” podcast
with hosts Terry Savage, Pam Krueger and Richard Eisenberg. Subscribe to insightful
newsletters such as HumbleDollar and RetirementRevised.

Start a money book club with friends and colleagues to read up on investing and retirement planning. Two of my favorite books that you might consider: “From Here to Financial Happiness” by Jonathan Clements, the former Wall Street Journal personal finance columnist and current Humble Dollar blogger and Retirement Game Changers: Strategies for a Healthy, Financially Secure, and Fulfilling Long Life by Steve Vernon, an actuary, a retirement adviser, and a research scholar at the Stanford Center on Longevity.

Talk about
money. Make money a regular topic of conversation with your spouse
or partner in a constructive way, not when there is a crisis, or with your girlfriends.
Begin by asking for their thoughts on a financial matter that you want to know
more about, say where to earn more on your savings, the pros and cons of
refinancing a mortgage. Discuss articles you’ve read. Suggest financial writers
to follow on Twitter or Like on Facebook. Then, you can chat about what you’ve picked
up from their postings.

The gist of all this: The knowledge that’s between your ears
is the one thing that can’t be taken away from you. That was my Irish-born
grandmother Ellen Nolan Hannon’s mantra. And I stand by it.

Kerry Hannon is
a leading expert and strategist on work and jobs, entrepreneurship, personal
finance and retirement. Kerry is the author of more than a dozen books,
including Great Pajama Jobs: Your Complete Guide to Working From Home, Never Too Old To Get Rich: The Entrepreneurs Guide To Starting
a Business Mid-Life, Great Jobs for Everyone 50+,
and Money Confidence.
Her on Twitter @kerryhannon