Women & wealth: Minding the gender gaps in financial needs
Money can be an intimidating topic—not to mention a major source of stress in many people’s lives. Women, in particular, tend to feel financial pressure when it comes to planning for their family’s future and building retirement savings. Interestingly, they’re also less likely than men to ask for financial help.1
In recognition of Women’s History Month, we sat down with Krystal Barker Buissereth, CFA®, Managing Director and Head of Financial Wellness at Morgan Stanley at Work, for insight into the challenges women face in meeting financial needs, and how to tackle them head on.
Q: How have allies or mentors helped you in your personal financial journey?
Krystal: Starting out in my career, which is often where the financial journey begins, I didn’t fully understand how to manage my personal finances. A background on Wall Street doesn’t necessarily translate into a road map for handling life in a high-cost city with college loans and no savings buffer. I found that my friends and peers were great resources. Turning to them for perspective on uncomfortable topics like asking for a raise at work or how to approach retirement savings helped me get comfortable talking about money—and normalized that it was ok to be confused about the journey.
To get comfortable with the topic, tap into people who are in a similar boat—or better yet, people who have already taken the journey. Then, turn to experts to make sure you’re on the right path.
Q: What unique challenges do women face when it comes to planning for and meeting their long-term financial goals?
Krystal: Certainly, there are challenges that all people—men and women—struggle with when it comes to personal finance. From building emergency savings, to paying down debt, to planning for retirement—it’s tough for everyone.
There are specific realities for women that tend to result in different financial needs.
That said, there are specific realities for women that tend to result in different financial needs. Women are disproportionately caregivers—not only for children, but also for aging parents—which is partially why we’ve seen women leave the workforce in larger numbers than men during the pandemic.
If women are spending less time in the workforce or taking a step back in their careers to attend to other responsibilities, it means they have less time or fewer opportunities to grow wealth. This all compounds the gender gaps we see in key pieces of an overall financial picture, like income, investing, and retirement savings. Then there’s the fact that women have longer life expectancies. So, on top of having less income and savings, they have to stretch it longer.
Finally, there is a financial literacy gap. Women may not be taking full advantage of the investment opportunities at their disposal because they feel less informed and less comfortable making financial decisions.
It’s also important to recognize the unique challenges facing women in minority groups, including the LGBTQ, Latinx, and Black communities. For instance, job losses during the pandemic have had an outsized negative impact on Black and Hispanic women.
Q: What advice would you offer women looking to improve their financial well-being? Is there anything you feel is an absolute priority?
Krystal: Managing your finances is a deeply unique and personal journey, but I do think there are four steps that can help everyone get on solid footing:
It starts with discovery. Do a self-assessment so you are clear on what your financial goals are and where you are on the path to achieving them. Look at debt levels, emergency savings, and retirement savings. Then consider what other goals you may have, like buying a home or paying for an education.
Second, get advice. Enlist trusted advisors—whoever they may be—to help determine your approach.
Third, implement your plan. Consider a range of products and services to help you reach your goals. This may include opening a savings or brokerage account, or investing in your employer’s retirement plan.
Finally, track your progress. Life and circumstances change. Monitor your goals to make sure they’re still relevant and you’re making measured progress towards them.
Q: What resources would you recommend for women who may feel intimidated by the topic, or for those looking to take the next steps in their financial journeys?
Krystal: For many people, their strongest resource may be the community right around them. Involve partners, children, and parents in financial conversations. Ask what has worked well for them or what they would do differently.
The employer is increasingly becoming an important resource for employees beyond a paycheck—from student debt solutions, to wellness programs, to financial planning assistance.
If you’re employed, talk to a human resources representative. The employer is increasingly becoming an important resource for employees beyond a paycheck—from student debt solutions, to wellness programs, to financial planning assistance. Learn about all the benefits available to you and tap into them.
There is a multitude of services out there, from self-directed options to financial consultants and advisors, that can help people plan and take charge of their financial futures. Do some research to figure out what approach may work for you.
Looking to take the next step in your financial journey? Here are a few ideas:
- Expand your know-how: E*TRADE and Morgan Stanley have educational resources spanning investing, trading, and retirement topics.
- Explore different account types: There are plenty of choices when it comes to saving and investing your money, including brokerage, retirement, professionally managed, and bank accounts.
- Consider talking to a professional: A financial consultant or advisor can help you find the right solution if you don’t want to go at it alone.
- Morgan Stanley Wealth Management, “Financial Stress: Closing the Gender Gap,” 10/28/19, https://www.morganstanley.com/atwork/articles/closing-the-gender-gap