In honor of Women’s History Month, Fidelity Investments breaks down how women investors can reduce their financial stress, finding that subtle changes in behavior can make all the difference.
While financial stress levels remain high among women no matter their total household income, the research emphasizes that taking action could significantly reduce anxiety around finances. According to Fidelity, women who have “made financial moves” in the past six months indicated less stress than women who haven’t.
“It’s not uncommon to feel stress when it comes to finances, so it’s critical we support women by providing proven ways to help them combat this feeling and build financial confidence,” said Sangeeta Moorjani, head of Tax Exempt Markets for Fidelity Investments.
Specifically, Fidelity research found that among clients who participate in a workplace plan, those who reported the smallest levels of stress were likelier to save for emergencies, save for retirement, and plan ahead.
Clients who saved for emergencies didn’t need to allocate six months or a year worth of savings to feel significantly less stressed. Once women saved three months’ worth of emergency savings, only 26% reported high stress levels compared to 86% of women without a rainy-day fund.
Small increases in retirement savings could also yield favorable financial outcomes. According to the research, 59% of women who saved up to 2% of their household income for retirement felt either a fair amount or a lot of stress. Once women save between 10% to 14%, only about 32% indicated similar stress levels. This number continued to fall as women increased their retirement savings contributions, demonstrating that financial stress could lessen as contributions increase, Fidelity argued.
Preparing financial goals for the short- and long-term future could also lessen financial stress, as just 38% of women who plan their finances a few months ahead report worrying about money, compared to 73% who only think days ahead.
As a result, more women are considering taking steps within the next six months to improve their financial position. Others are breaking down archaic stereotypes and misconceptions surrounding money, including the idea that men are better at managing finances, while leaning into their own confidence. Forty-four percent of Gen Z women say they have “unlearned” this stereotype, compared to 32% of Millennial women and 29% of Gen X women. Women respondents also noted feeling more open to having conversations around money with their family and friends.
Still, despite the confidence, Fidelity notes there is more work to be done: While 52% of women believe they are better at managing finances, 65% say men have had a better return on their investment in the past 10 years.
“Encouragingly, women today are debunking the financial stereotypes that have historically held us back,” added Lorna Kapusta, head of Women and Engagement at Fidelity Investments. “Over the past few years, we’ve seen women make incredible progress with their money. Even though women are making smart money choices, we’re also seeing them continue to doubt themselves. We are committed to not only helping women take the next step on their financial journeys, but also feel confident in their financial choices and their financial futures.”
Fidelity’s study included findings of a national online survey that represented 3,008 adults, 18 years of age and older.
SEE ALSO:
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- As Women’s Earnings Rise, So Do Their Financial Responsibilities
- Less Women are Confident in Their Ability to Fully Retire
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
