Webcast #29: Only 48% of Women Feel Confident About their Finances (9 minutes)

Recently, the Bank of America published a new report discussing the relationship between women and money.

The report concluded that while 94% of females believe they will be personally responsible for managing their own finances at some point, just 48% are confident doing so and only 28% feel empowered to act.

94% Believe they will be Personally Responsible for their Finances

Today’s newborn will live an average life expectancy almost 25 years longer than someone born a century ago. Though Canadians are living longer than ever before, the average life expectancy for a woman is 84 years old, exceeding her male counterpart by a full 4 years.

Fewer decide to get married nowadays. According to an Angus Reid poll, while 56% of Canadians between the ages of 18-34 were married in 1971, this figure dropped to only 22% as of 2016. At the time the poll was conducted in 2018, a full 53% of all Canadians said that marriage was either “not important” or “not at all important” to them. Though on the decline, there were also 57,000 Canadian divorces in 2019 (7.7 people per 1,000).

All this is to say that no one should ever depend on a significant other to manage their money.

Only 48% Feel Confident About Finances

While many females expressed confidence managing their short-term financial obligations, such as paying off monthly bills (92%) and following a budget (87%), far fewer had the confidence addressing longer-term objectives, such as managing investments (53%) and creating a diversified portfolio (44%).

Yet 28% Empowered to Act

Only 28% of women said they felt empowered to act. Several likely reasons can be attributed to this troubling statistic.

First, 38% of respondents said they lack the requisite savings. Saving and investing early in life accompanies not only the benefit of compound interest but also the education it provides along the way. We have always felt that the education system should find a place to teach young students the basics of personal finance. Failing that, encouraging younger friends and family members to save and invest at a young age is the next best thing. The survey found that 44% of females regretted not investing earlier in life.

Second, 32% of respondents feel they lack the required knowledge. Third, 22% believe investments are too risky. Working with a qualified portfolio manager would address both these concerns. Many have commitments – family, career, or other private interests – that are of higher personal importance than following the market’s activity. When we meet with our clients, we discuss our investment thought process and listen attentively to make a proper assessment of each client’s risk profile. This enables us to design a customized portfolio for each client to suit their comfort level.

While the Bank of America report presents disappointing statistics, many can be addressed through saving early, working with a portfolio manager, and encouraging other young people to do the same.