A New Study
Single women – those who have never married, those who have experienced divorce, and those who have outlived a spouse – need to take a more proactive approach to growing and protecting their finances, according to a new study.
The Single Women and Money Study found that while the overwhelming majority of single women (97%) believe it is important to be engaged in managing their money, three factors were holding them back from taking action:
1) underestimating their knowledge and experience,
2) neglecting to plan ahead for their financial future, and
3) saving too heavily in cash.
Money causes stress and worry
Women have more financial earning and decision-making power today than in the past, yet, many limit the benefits of that power by shying away from taking control of their financial futures.
More women are choosing to remain single and others take on that sole financial responsibility through divorce or outliving a spouse. The study shows that it is critical that women be actively involved and invested in the financial choices that can allow them to make smart choices.
Single women are less likely to consider themselves knowledgeable than other demographic groups when it comes to saving for retirement, creating a financial plan and investing. This perception may be holding some women back from taking the necessary steps to secure their desired financial future.
While most single women associate their finances with positive sentiments like security, peace of mind and being in control, some also see their finances as a cause for stress and worry, more so than their male counterparts.
Single women were the least likely (28%) to have a comprehensive financial plan in place to help them set savings goals and navigate paying down debt. And, while they worry about unexpected financial hurdles, nearly half (47%) have not put an emergency fund in place to cover three-to-six months of essential expenses.
Single women are also likely not to have other long-term financial protections in place that can be critical in times of necessity. Women who have never married are the least likely to have a number of key safeguards in place, compared to those who have had a partner at some point. But many said they wanted to become better prepared, with more than half saying they need to spend more time on their finances or admitting they don’t spend any time managing their finances at all.
Best practices for women
Make it a priority early to establish strong financial habits. Here is a short list of best practices to get you started:
• Get into the driver’s seat: know what you own, how much you owe, and what your goals are for your money to ensure that your investments are working toward your future.
• Put financial safeguards into place, including a holistic financial plan that is based on your individual situation and goals.
• Know that your investments suited toward your tolerance for risk, and time horizon to save.
• Make it a priority to check-in on your finances at least annually.
Widows share wisdom
Widowed women are more likely than any other group surveyed to say they feel confident about their finances and in control of their money. This positive financial outlook may be connected to early planning. About 65% of widows say they had a financial plan in place prior to losing their spouse, and 80% of those women had worked together with their partner to build that plan.
• Know where all important financial and healthcare information can be found
• Have a will and other estate documents in place
• Make sure beneficiaries are correct and current for all accounts
• Make sure both names are on mortgages, insurance policies, and other accounts
• Don’t delegate financial planning – make sure that you work together
Divorced women more financially free, in control
Major life events can often be a catalyst for action with our finances. Among divorced women, the large majority said they feel more in control of their finances after their divorced (84%) and have more financial freedom than when they were married (76%). Two thirds said they are in better financial shape today, although nearly half (45%) report they have had to cut back their spending to save post-divorce. One quarter applied for or started a new job, and 18% improved their earnings prospects by working toward a new educational degree.
For some, feeling more financially savvy came immediately. For others, this took time: one third divorce said that it took more than a year after divorce to feel financially grounded; roughly 25% said they still don’t feel secure.
When asked what financial choices they would have made differently in their marriage, divorced singles said they wish they had saved more and better educated themselves about how to invest for the long term.
Results of the survey were based on an online omnibus conducted among a demographically representative U.S. sample of 2,260 adults comprising 1,503 single women (including never married, divorced, and widowed), 250 single men, 251 married women and 256 married men 18 years of age and older. The survey funded by Fidelity was completed during the period May 16-23, 2017 by MarketVision Research, an independent research firm.