A look at what financial literacy is and how significantly it impacts women's lives.
In this episode, we’re talking about financial literacy specifically for women. The statistics are pretty depressing.
According to CNBC, nearly half of Americans don’t expect to have enough money to retire comfortably and the Federal Reserve says that 40% of Americans can’t afford a $400 emergency expense.
And it's even worse for women.
- The 5 key components of financial literacy
- Several shocking statistics about women and retirement from the TransAmerica Center for Retirement Research
- What Coach Haremski, my high school health teacher, taught me about finances
- What I'm doing to try to fix this systemic problem of financial illiteracy and empower people - especially women who generally have less savings and outlive men - to be able to live their best life as long as they live.
This is the My Money, My Freedom podcast, where we unpack and simplify all things money so that you'll always have more than enough to live your best life for life. Now here's your host. Financial coach Susan Lassiter.-Lyons.
Today we're talking about financial literacy, specifically financial literacy for women. So what exactly does financial literacy even mean?
Well, um, I'll tell you, there are basically five components of financial literacy.
Five things that make it up, and it all has to do with money.
So the first is earning money, then spending money, saving money, investing money, borrowing money and protecting money.
And we're gonna be talking about all those money things in later episodes of this show.
But you might be wondering now, why are we talking really only about women specifically?
Because that's who I work with in my financial coaching business. And honestly, the statistics about women and finances are pretty scary and horrendous.
Listen to this.
According to CNBC, nearly half of Americans don't expect to have enough money to retire comfortably, credit card debt has reached its highest point ever, and the Federal Reserve says that 40% of Americans can't even afford a $400 emergency expense.
And it's worse for women.
According to the Transamerica Center for Retirement Research - yes, I am the nerd that reads that research - only 12% of women are very confident that they will ever be able to retire with a comfortable lifestyle.
55% of women expect to retire after age 65 or never really plan to retire at all.
54% plan to work after they retire.
And of those who say that they plan to work past age 65 or in retirement, 84% of them say that they have to do it for financial reasons.
32% of women expect Social Security to be their only and I'm talking their sole source of retirement income.
Women's estimated median Total household retirement savings is just $23,000.
$23,000 is what the average woman has saved for retirement.
However, women believe that they're probably going to need to have about $500,000 saved in order to feel financially secure in retirement.
But 54% of the ones who say they think they're going to need that $500,000 say that they just guessed at that number.
A couple more stats for you before we get into the nitty gritty.
Only 15% of women have any kind of a retirement strategy, and only 14% of women discuss saving investing in planning for retirement with family or friends.
Here's the deal.
Financial illiteracy will wreck your future.
And that's a super toxic, very pervasive problem.
Because here in the United States, no one really talks about it or even really teaches it in any kind of a meaningful way.
We don't learn it in school.
I remember only ever talking about it once in high school - money, that is.
And that was when our basketball coach, Coach Haremski, taught us how to write a check in health class.
We just practiced writing checks.
We didn't practice balancing a checkbook or understanding the fact that you actually had to have money in the checking account before you could write a check, which became a problem for me later on when I turned 18.
But you know, what the heck?
It's no wonder that most people either let their employer decide what they invest in via their 401(k) or even worse, just blindly hand their money over to some stranger to manage it for them.
You know, in my coaching business, I speak with anywhere from 2 to 3 women a day about their retirement investments.
And I remember once I asked this woman where her retirement money was invested, thinking that she was going to say, like Fidelity or Schwab or maybe a certain mutual fund or a stock.
And instead she literally said that it was "with some guy in Ohio named Dave."
She didn't know his last name, but she knew that he was definitely in Ohio.
Look, I get it.
For me growing up, financial stuff was a total mystery.
We didn't talk about it at all.
I remember my Gramma used to say that it wasn't a topic for polite conversation, whatever that means.
Because I know we talked about a whole lot of other stuff that didn't seem that polite to me.
I mean, I had absolutely no idea what our financial situation was growing up. I knew we weren't rolling in it.
We lived in an apartment. We didn't have a whole lot of money. I had a great childhood. Our apartment had a pool, and that was really all I needed in order to have a great childhood.
But I didn't know how bad it was until my mom divorced my alcoholic step dad and lost her house to foreclosure and then had to file bankruptcy several years later.
When she passed away in 2017, I was stunned to discover when I was settling her affairs that she had less than $200 to her name.
200 bucks, no savings, no retirement, nothing but a $1600 a month Social Security check coming in. And her rent was $1400.
Now I was subsidizing that by paying for her groceries and utilities and giving her cash.
But the bottom line is that she was 76 years old and destitute.
After working all of her life and doing all the things that she was allegedly supposed to do in order to have a great retirement.
She worked. She retired. She had a 401(k). She was investing the old way the old fashioned way in her 401(k) which we'll talk about in subsequent episodes of this show.
And she suffered through not one but two severe market turndowns... downturns? Market downturns.
And she borrowed against her 401(k) to try to save her house.
What if she was alone? You know, what if she didn't have a kid who could support her financially?
And that's really the reason why I do what I do.
To try to fix this systemic problem of financial illiteracy and empower people, especially women who have typically less savings than men and almost always outlive men, to be able to live their best life as long as they live.
And that's what this podcast is all about.
I'm excited to get the message out, and I am super happy that you're here.
Thanks for listening to My Money My Freedom. Visit our website at mymoneymyfreedom. co and follow us on Instagram @mymoneymyfreedomhq