The ultimate finance guide for women: Experts share financial tips that really work


Experts weigh in on what’s holding women back, and what they can do better to catch up in accumulating more personal wealth

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Women continue to shine in all facets of business, cracking the proverbial glass ceiling once and for all, but they are unfortunately still the weaker sex when it comes to personal finance. Women have a perhaps-unfounded reputation for being less financially literate than men and for being more risk averse when it comes to investing, but they often leave their financial planning to their male counterparts with detrimental long-term results.

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A recent analysis of group retirement income balances by asset management giant Mercer LLC showed that women retire with account balances that are 30 per cent lower than men. They also end up working two years longer. Furthermore, a 2021 survey by the Bank of Montreal found that women were 18 per cent less likely than men to know how much money they will need for retirement.

Just what is it about finance that eludes women when they’re so darn good at everything else? We asked a group of experts experienced in helping women find their footing in the personal finance world to weigh in on what’s holding women back, and what they can do better to catch up in terms of accumulating more personal wealth.

Balancing the budget

Growing up with a father who started his own brokerage firm 30 years ago, Nicole Simons saw the benefits of good money management firsthand. She wanted a job where she, too, could help guide others, especially black women, towards financial success. Now, she is the N in CPN Financial Services Ltd., a family-run business based in Brampton, Ont., where 90 per cent of her clients are female.

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On what’s holding women back : Budgeting itself has this stigma of being negative and restrictive. There’s this fear that if you have a budget, you’re going to have to give up the things you love. But budgeting is really just a spending plan to help you prioritize what you want to spend on and what you don’t. There’s also a lot of negative self-talk among women based on previous spending mistakes. If they try a budget and it doesn’t work, they may automatically think it’s not possible for them. But if you’re still living in the past and not open to change, you will hit a roadblock when it comes to budgeting and keep perpetuating the same habits.

Budget tips that work : Create a budget, whether that’s a simple Excel sheet or something an adviser develops for you. If you don’t know what’s going on with your finances, it doesn’t matter how much money you’re making. A major commonality I see among women is not looking at their statements carefully enough and recognizing where their excess spending is happening. Having a budget and tracking your expenses can help ensure your spending is aligned with the lifestyle that you’re trying to create. Too much access all the time can be a problem, too, so part of my strategy is to set up “out of sight, out of mind” automatic savings accounts as a forced way to make sure money is put aside each month.

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It’s a good idea to have an emergency fund to cover immediate expenses (i.e., rent, car payments, utilities, mortgage) for three to six months for those unexpected surprises. If you’re going to invest in a tax-free savings account (TFSA), make sure the money is not sitting in cash, but growing so you’re actually saving tax and using the TFSA for its full purpose. There are also those who say you should pay off all your debt before you invest, but I’m an advocate of doing both. Yes, you should tackle high-interest debt first and foremost, but you can also build a small nest egg in the process.

Life insurance is the foundation of any financial plan, too. I’m trying to educate this next generation about the importance of life insurance to create generational wealth. A lot of times, especially in the black community, life insurance wasn’t something that was spoken about. But by not having life insurance, you will have an impact on the generation after. I’m a big advocate for making sure people have adequate insurance to not only cover their final expenses and burial, but to ensure whoever is left behind is set up for financial success.

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Finally, give yourself permission to change your budget as needed to fit different stages. Your life is going to keep changing and your budget should change along with it. It should also be realistic as to what you can afford based on your disposable income, so you don’t get discouraged.

Investing with confidence

Julia Chung, co-founder, CEO and senior financial planner at Spring Planning Inc., based in Surrey, B.C., is inundated with emails and phone calls coming from females in their 20s and 30s eager to learn more about investing and financial planning. So much so, she and a colleague in 2015 published an e-book in collaboration with Modern Advisor called Women & Money.

On what’s holding women back : Women in North America tend to be less aggressive when it comes to how they invest compared to women in Asian countries, for example. Generally speaking, I think that stems from a negative view of math and numbers. Then you add the complexity of investing, which is an industry that traditionally talks down to its clients, and women in particular, and it’s the perfect storm. We have to start by recognizing that these feelings of inadequacy in women didn’t come from an internal place, but from societal impacts. Every industry conference I go to includes at least one speaker on “how to talk to women,” which is great, but also tells me this is a mystery that it shouldn’t be.

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Investing tips that work : First off, recognize that you don’t need to understand how to calculate bond yields or how to trade to be a good investor. Start by determining what you want to achieve and then how much money you need to save in which kind of account to reach those goals. People often put the cart before the horse and it’s difficult to understand what to put in that cart before you know where you’re going.

Whether you need an investing platform where you do it all yourself or one where you get some education, support and conversation is another key question. The truth is, both men and women often need the latter.

Remember that your male neighbour, uncle or whoever else is offering investing tips is not trying to reach the same places you are. As males, they will typically live a shorter life and are statistically less likely to spend as much time in long-term care facilities. It’s OK to be cautious with your portfolio if you’ve done the planning ahead of time. Think about what your cash-flow needs will be at various points in your life and how you will draw down from that portfolio along the way. Across the board, there are some old adages about how we should invest, but rules of thumb don’t work here. Above all else, ask questions of your adviser whenever anything is unclear. You’re not a dummy for not understanding someone who is immersed in this language every day.

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Preparing for better or worse

Elke Rubach was 15 years old when her dad suddenly died, leaving her family without insurance or any financial plan. A former lawyer, she founded boutique Toronto firm Rubach Wealth in 2012, where one of her core missions is to educate women (who make up 70 per cent of her clientele) on the importance of financial literacy so they don’t feel “stuck” in bad relationships or dependent on their partners for their financial decisions.

On what’s holding women back : While women may be breaking glass ceilings in the corporate world, they aren’t putting the same focus on personal relationships when it comes to finances. Perhaps they’re more successful than their partners, so they’ve handed over money control as a way to balance the power dynamic. I have women who come to me contemplating divorce, but are afraid they can’t afford to leave, even though they’re making $300,000 to $500,000 a year. They may have partners who have maxed-out credit cards, have gambling addictions or are otherwise draining them financially because they don’t have a firm handle on their finances. Then there are divorced women who carry mountains of guilt and have no idea how much of their finances they’re funnelling to their children.

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Relationship-building (and -breaking) tips that work : Be sure to set the rules from the get-go. In addition to a cohabitation or prenuptial agreement, renew your will and be sure both sides are crystal clear on expenses and who will be contributing to what. Make sure you’re on the same page on what is considered discretionary spending and who will take maternity/paternity leave and for how long. If you can’t talk to your spouse/partner about these things openly at the beginning of a relationship, there are bigger issues at play.

On the other side, when a relationship ends, keep it “human” at all times as no dollar amount will make up for having peace, especially with children involved. When negotiating, remember the small details, too, such as who is keeping what memberships and who gets the loyalty points. Watch the debt on joint accounts, as creditors will consider you both liable regardless of what your divorce agreement says. Always remember to revise your will and check to see how the terms of your divorce may alter your retirement goals. Keeping additional money in your emergency fund is a good idea to prepare yourself for missed alimony or child-support payments.

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As a woman, I always advise having a purpose so you can stay financially independent regardless of relationship status and wealth. Having a financial plan doesn’t need to be incomprehensible, but you need an adviser you feel comfortable discussing these kinds of issues with openly.

Planning for retirement and beyond

Laurie Campbell has more than 30 years of experience helping individuals take control of their finances. As director of Client Financial Wellness at Bromwich + Smith Inc., she currently works with a team of licensed insolvency trustees and debt-relief specialists and is always keen to help women prepare for a better retirement.

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On what’s holding women back : There is a gender bias in the way females come into adulthood and look at what is financially important. Many of us have seen our mothers struggle with money or leave the money planning to their spouses. There is not enough emphasis on putting aside money at an early age; we don’t realize that the earlier we start a financial plan, the more money we’ll accumulate for retirement.

Women still make significantly less than men, so it’s not surprising they have to work longer before they retire. Maternity leave and time spent raising children will also impact wealth accumulation over the years. Plus, as women age, we are always worrying about making sure there is enough to leave to the children. Time and time again, I’ve seen elderly women helping adult children to their own financial detriment.

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Retirement tips that work : Five to 10 years before retirement, start minimizing investment risk. Many people have been in situations where they are in high-risk investments and realize upon retirement that the market has fallen, and they have to get back into the workforce or sell their assets. They end up living the retirement life they never expected to. That’s why it’s so important to have a solid plan in place before you stop working. Or, if your company allows it, try a gradual tiered retirement where you’re working a few days a week for a few years. There is much more appetite right now for employers to allow that in order to retain certain skill sets.

Estate planning advice : Go in with your eyes wide open and don’t be afraid to talk about money. If you’re with a partner, discuss what will happen if one spouse dies and the other remarries. Determine your goals together and make provisions for your dependents or your charities of choice after you’re gone. I think there are still far too many people out there nickel and diming their own lives, then passing away and leaving so much to their families. FPM

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