The results are in: women are better savers than men – never mind what her shoe collection might say. A study by Vanguard showed that females are 11% more likely than men to participate in employer-sponsored savings plans, such as 401ks.
The number is even higher for women who earn less than $100,000 per year – this group participates in savings plan 20% more than their male peers.1
Women Save More, But Still Fall Short
The problem is women still might not have enough saved. A report by Aon says that women should have at least 11.5 times their final pay saved up by retirement.2
But because women don’t earn as much as men, they accumulate less in retirement savings – even though they save more. The most at-risk of outliving their savings is never-married, divorced, and widowed women.3
As men and women age, men earn more and more, widening the pay gap to 44 percent by the age of 80.
Knowledge Is Half the Battle
Now that you know the obstacles you face, you can do something to make sure you’re on solid ground during retirement. There are two basic choices here: make more money or save more money. In this article, we’ll focus on the latter.
3 Easy Saving Tips Today
1. First and foremost, keep a Money Diary. I have personally created one which you can download for FREE, right here.
This will help you track expenses, income and debt. It will also help you figure out whether it’s better to put extra money toward paying off debt or squirreling it away in a retirement savings account.
By understanding your money habits, you will feel empowered to steer your money into areas that will work for you.
2. Save automatically. People who auto enroll in savings programs have more saved than people who don’t.
If your employer offers a 401k, make sure you automatically put some of your paycheck into it. Always pay yourself first! Look at your retirement savings like a bill – it needs to be paid regularly.
3. Pay Off Credit Card Debt in Full Each Month. Avoid high interest rates and debt accumulation by paying off your cards every month.
You will feel the sting of paying a $1000 bill at the end of the month – but it’s better than paying just the minimum and owing a lot of money in interest. Another side bonus of paying off debt every month is that you might not want to run up big credit card bills.
It hurts more to pony up a few hundred dollars to pay off your Chase card than to pay the $30 minimum. Adding this sizable bill to your monthly expenses can get old very quickly – so it might deter you from maxing out your cards. Remember, by paying the least required amount, you are digging yourself further into the debt hole.
Those are just three simple tips that you can use today. But be sure to tune into the Money Confidence Podcast to get even more advice, tips and information designed to fatten up your bottom line!
1https://institutional.vanguard.com/VGApp/iip/site/institutional/researchcommentary/article/InvResWomenVsMenDCPlans
2http://www.forbes.com/sites/andrewbiggs/2016/07/05/youll-need-how-much-money-for-retirement/#299043b2c020
3http://www.epi.org/publication/retirement-in-america/#charts