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A recent survey from Fidelity asked women adult women to share their actions and attitudes around money management. According to the 2022 Money Moves survey, 36% of women above age 36 say their biggest financial regret is waiting too long to start investing for retirement. Lorna Kapusta, Fidelity’s Head of Women Investors, echoes this.
According to Kapusta, a staggering amount of women share one other common financial regret. “Women often also regret waiting to set up a financial plan,” she explains. “Seventy-one percent of women said once they set up a financial plan, they felt more confident.”
Creating a financial plan can mean understanding your cash flow (what comes in and what gets spent), having a budget, knowing when your bills are due each month (and creating a system to automatically pay them) and even knowing how much you can afford to save each month. This can be an important starting point for people who are trying to improve their finances or reach a specific goal.
But one major roadblock women have faced when it comes to taking that first step to start investing has been a lack of confidence.
“Only 33% of women feel confident in their ability to make investment decisions, which understandably makes it hard to allocate their hard earned savings into investing,” Kapusta says.
And on top of that, 70% of women say they would need to know more about picking stocks in order to be more active when it comes to investing, according to Fidelity’s 2021 Women and Investing Study. While it’s important to understand the implications of your actions (especially when your money is involved), sometimes waiting too long to take action can result in no action at all. And when it comes to investing, it’s better to start small with some low-lift investments rather than not start at all.
The pandemic also played a role in women’s ability to invest, though, not always in a positive way. “The pandemic caused lifestyle changes that have disproportionately impacted women,” Kapusta explains. “According to a survey conducted by Fidelity in 2020, 39% of women were actively considering leaving the workforce or reducing their hours.”
A reduction in income (or no income at all) can significantly change your ability to allocate money toward your retirement accounts and other investment accounts. In such a case, just affording basic necessities like groceries and rent or a mortgage would have been more of a priority. And with less money to put toward investing, this means women who have had to reduce their work hours or leave the workforce may have had to delay investing or pause any investment contributions.
The survey cited increased caregiving responsibilities as the reason women have made the decision to reduce their activity in the workforce. Broken down further, almost half of respondents (42%) said that they needed to step back from the workforce to fulfill homeschooling needs for their children during the pandemic; 27% reported that the cost of hiring someone else to homeschool and care for their children was just too expensive so they opted to do it themselves.