Why Every Woman Needs to Save More Money

The ability to save money is an essential skill for good financial health, and we all know we need to save money to live comfortably. But did you know women in particular need to save more? We’ll explain why women’s savings needs are different and why they need to save more, along with savings tips for women.

Why women need to save more

Women have to manage unique challenges when it comes to their personal finances. We’ll review some of these obstacles and why women need to save more.

Women earn less on average

One of the financial challenges working women face is the gender pay gap. According to Pew Research Center, women earned 84% of what men earned in 2020. That means women have to work an extra 42 days to earn what men make. While the gap has narrowed, it still remains, and when you consider race, the gap skews even higher.

Women live longer

American women have an average life expectancy of 81 years. Not only is that five years longer than men, but women’s life expectancy rates have been trending upwards over time. This means that women will have longer retirements, putting them at greater risk of outliving their savings.

Women are more likely to take career breaks

When it comes to raising children and caring for aging parents, women tend to be the ones to leave the workforce to take on these responsibilities. Career breaks can make sense financially on the surface, especially with the rising costs of childcare and eldercare. But these pauses in employment can mean a loss in income, changes to insurance and your ability to invest, which contribute to a drop in savings. Preparing your finances can help you overcome these challenges.

How to save more

Women can save more money and live comfortably with greater financial independence using these savings tips.

Have a financial plan

Creating a financial plan provides a comprehensive overview of your current financial situation and empowers you to set and reach savings goals. When you make your financial plan, you’ll take stock of assets and liabilities to understand your financial health and identify opportunities for better money management.

Whether building an emergency fund, purchasing real estate, planning for career breaks, or saving for retirement, a financial plan can help you prepare for life’s milestones, stay on track with savings goals and achieve financial independence. Learn more about organizing your finances for financial planning.

Diversify your savings options

Given some of the earnings disadvantages facing women, a traditional savings account alone isn’t enough to reach long-term savings goals. Diversify where you put your money to work to maximize your earnings potential.

Investing your money can help you accumulate wealth faster. Some women wait to invest, but the sooner you begin, the more time your money has to grow. Start small with what you can and increase your contributions over time. You can get started easily by enrolling in a 401(k) or opening an Individual Retirement Account (IRA).

For predictable returns on your non-retirement dollars, consider a High-Yield CD. These insured accounts lock your money in for a set period of time with a fixed interest rate—providing you guaranteed earnings at a rate that’s generally higher than traditional savings accounts.

If you’re not a BrioDirect client, become one today when you apply to open a High-Yield Savings account online. Our simple online application takes minutes to complete.

Want to learn more about savings? Read these tips to set and reach financial goals.