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Study Reveals Women's Confidence in Managing Finances and Desire for Support Without Judgment

 


By 2030, women are expected to inherit $30 billion in assets from older generations. However, according to a survey by Investopedia and REAL SIMPLE, women need more wealth-building guidance and supportive environments free of judgment, even among friends.


The 2024 Her Money Mindset Survey examined how women of different generations and income levels think about, discuss, and manage their finances.


### Key Findings


- **Income Allocation**: Women spend 63% of their income on necessities, with 64% having less than $500 left monthly after these expenses.

- **Investment Participation**: Only 39% of women are invested in financial markets, with variations based on age, income, and financial literacy.

- **Financial Support**: One in five women has helped someone else with a significant expense while struggling with their own.

- **Money Discussions**: Conversations about money among friends are common, though the detail and honesty of these discussions vary.

- **Financial Confidence**: Women generally feel confident in their financial decisions and are eager to learn more about saving and investing.


### Insights from the Survey


REAL SIMPLE's Editor in Chief, Lauren Iannotti, emphasized the importance of open financial discussions: "Often, we avoid talking about money because it seems impolite. However, experts agree that open conversations about finances help normalize the topic, motivate us to save, and simplify complex situations. Collaborating with Investopedia, we aimed to uncover the barriers to women's financial confidence to develop plans to overcome them."


Conducted amid high inflation and economic uncertainty, the study found that women, despite tight budgets, are generous and actively seek financial information. They are resilient and confident money managers, but there is always more to learn and discuss.


### Short-Term Financial Focus


Regardless of generation and income, most women spend the majority of their monthly income (63%) on necessities like housing, transportation, healthcare, education, and childcare. Flexible spending accounts for 20%, and the remaining 17% goes towards financial goals.


Monthly bills take a significant portion of income, with 64% of women having less than $500 left each month after covering necessities, averaging $422. Additionally, 44% have less than $250 left monthly.


While most women manage to cover their expenses, 54% struggle with at least one type of expense. Furthermore, 67% of women carry some form of debt, mainly credit card debt, followed by mortgages and car loans.


Despite financial pressures, women are diligent about tracking their expenses and setting short-term goals. About 76% monitor their monthly spending, and 72% save for short-term objectives. The most common three-year financial goals include saving for retirement, buying a car, and paying off credit card debt.


### Women as Investors


The survey highlights the nuanced investment behavior among women. While only 39% of women are currently invested, this rate is higher among Generation X and older women (42%) and those earning over $75,000 annually (58%).


Popular investment vehicles include retirement accounts, stocks, and mutual funds. Younger women, particularly millennials, show a greater interest in cryptocurrency. Among women who invest, 51% take pride in their investment decisions.


### Investment Mindset


Women’s investment behaviors are influenced by age, income, and financial literacy. Four key themes emerged from their responses:


1. **Professional Guidance**: Many women value seeking help from financial advisors.

2. **Self-Education**: Women emphasize the importance of educating themselves about investing.

3. **Strategic Discussions**: They appreciate discussing investment strategies with peers.

4. **Developed Habits**: Women stress the importance of developing and maintaining good financial habits.


### Barriers to Investment


Despite positive sentiments, knowledge gaps hinder some women from investing or seeing themselves as investors. For example, although 53% of women said they are not invested, 10% of these respondents have retirement accounts like 401(k)s or IRAs.


Common reasons for not investing include not having enough money and fear of losing money. Women with lower household incomes are more likely to cite the lack of funds as a reason. Additionally, fear and uncertainty about investing deter 29% from investing, and 25% do not know where to start.


### Financial Generosity


Despite their own financial struggles, women are financially generous. Most women (67%) have supported someone financially, with this rate rising to 73% among younger women. Women are also willing to cover smaller expenses, like paying for a friend's meal.


### Money Conversations


Women have mixed feelings about discussing money. While 70% sometimes talk to friends about money, the detail and truthfulness of these discussions vary. Younger women and those with higher household incomes are more likely to talk about money with friends. Common topics include budgeting and future planning, with 1 in 3 discussing investment decisions.


However, sharing detailed financial information is rare. About 51% of women who discuss money with friends share very little about their own financial situations.


### Conclusion


As women prepare to inherit a significant amount of wealth by 2030, it is crucial to provide them with the necessary tools and support to manage and grow their assets effectively. This includes fostering an environment where financial discussions are normalized and free from judgment. By doing so, women can enhance their financial confidence and secure their financial futures.

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