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Start Owning Your Future, Right Now! #OwnmyFuture

Set Aside the Optimism Bias and Start Owning Your Future, Right Now! #OwnmyFuture

“This is a sponsored post for SheSpeaks/Prudential written by Guest Blogger Danielle Wilson

Looking back, as a teen I think the furthest thought from my mind would be, that as the week of my 35th birthday approached I’d be finding myself unemployed – well suddenly self employed and unsure of what the future had in store as a wife and mom of two. Having no concrete plan can certainly lead to a bit of uncertainty and I was trying not to panic. All I knew was that I couldn’t justify investing in and studying to be licensed in yet another field, just because I was good at doing my job, not because I loved what I did, or because it was making some huge difference to better society or because I was bringing home a significant salary increase.

In fact there was no raise, just a few more hours a week that surely wouldn’t cover the cost of our children needing to now be in after school care. Admittedly the job was my safety net while I worked on pursuing my own entrepreneurial dreams and tried to create a better health regimen while battling a chronic illness. I didn’t need a milestone year to tell me it was time to create a plan.After attending the 2016 S.H.E Summit financial planning panel with Prudential it seemed almost obvious that I needed to work harder at owning my future, starting with my finances.

My mother always advised me to never ask “ Well, what else can happen?” she swore it was like you were testing fate by saying that and there was a point at the end of 2016 where I seriously just couldn’t keep up with the craziness that was happening in our day to day. Maybe just two months before my 35th birthday, I thought it would be a great idea to cover the S.H.E Summit to help map out my financial journey better. During the panel – a key point that was highlighted early on was how so many people indulge in “Optimism Bias” which simply means they underestimate negative things happening to them, they don’t believe it can happen to them.

After the unexpectedly, extremely rocky year 2016 was turning out to be, I think my husband and I were in fact just the opposite – we were starting to just think any dang horrible thing could happen and we were far from prepared. Everything that could happen in fact did – two emergency surgeries, three unexpected passings of loved ones, two jobs lost and we nearly lost our home all in a course of a year. I’d need more than one blog post to give you all the emotionally exhausting details but it was a lot to wrap our head around and to stretch the wallet for.

What I loved most about the Prudential panel was just how honest these women were with their personal experiences and how they shared their financial journey. It was as if I knew them personally and was just chatting it up with a few girlfriends and I know through their relatable conversation that I needed to be taking notes!

There are just so many factors that go into financial planning and it seems that although women have taken on new roles and responsibilities in so many areas of their lives, when it comes to taking charge of their finances, statistics show that women are still falling behind:

  • On average women’s have 30% lower retirement balances than men.1
  • 44% of women have no life insurance. Even among the ones that do own life insurance, most are underinsured.2

There is a real paradox here. Women retire with 67% of the wealth of men, and they live 5-6 years longer than men do.3 Women are more likely to be single later in life.  Marriage patterns have changed over the last few decades.  Divorce has become more prevalent, and more women are choosing to remain single. 4

Four eye-opening gaps that explain the challenge for women had been highlighted:

 

  1. TIME

Having a chronic illness has definitely made my working a full-time 9-5 job quite difficult so I’ve always considered the fact that I was a jack-of-all-trades to be a blessing. With a true hustling spirit, I managed to juggle four streams of income that allowed me to work from home part-time, but it was all exhausting when I added the everyday responsibilities I had to care for my family.  

Did you know that on average, women in the U.S. spend 28 hours per week on household chores?  – 65 percent more than the average for men.5

  1. Wage & Income Gap
  • The average woman working full-time earns 79% of the income earned by her male counterpart.6 This is because of many issues – lower likelihood to negotiate salaries, time out of the workforce, differences in pay.
  • The wage gap not only impacts women’s 401K balances over their lifetime but it also impacts their social security payments. Predictably women’s social security benefits are 27% lower than that of their male counterparts.7
  1.     Investment Gap

Women don’t invest to the same degree as men.8  Women’s discomfort with investing comes at a high cost for them: They are apt to delay investing, invest more in lower risk, lower return investments and are more likely to run out of money in retirement.

  1.    Women are Living Longer and Alone

Women outlive men by an average of 5-6 years.3  Are they prepared financially for these years?

I’m sure if you’re going through or have been through anything like us you’re asking yourself “How on Earth can I prepare for the future and save for retirement, when I’m just trying to pay the bills of TODAY?” Trust me I get it, but while listening to Lisa Nichols and the other forces on that stage a lot of it made sense.

We’re so busy taking care of everyone else, and aren’t realizing that our own financial security will alleviate serious burdens to our own family members, our children later down the line. Lisa made a great point by conveying the importance making your dreams tangible & funding them, she encouraged writing yourself a check {make sure to deposit it!}

It’s never too late, so why not start now? Begin to write the narrative of your future, push aside the optimism bias and start your financial planning. Ask yourself “How can I own my future” and let Prudential help you be prepared.

Thank You to Danielle Wilson for Contributing this super informative piece

Sources:

1) Prudential Retirement analysis reflecting defined contribution plan balances of Prudential record-kept plans as of December 31, 2015.

2) LIMRA study, Life Insurance Ownership in Focus, U.S. Person-Level Trends: 2016

3) Prudential Retirement analysis; National Center for Health Statistics, Health, United States, 2015: With Special Feature on Racial and Ethnic Health Disparities. Hyattsville, MD. 2016.

4) Cruz, Julisa, “Marriage: More Than a Century of Change” (FP13-13), National Center for Family & Marriage, 2013,)

5) Organisation for Economic Cooperation and Development, October 2016, http://stats.oecd.org/index.aspx?queryid=54757.

6) U.S. Census Bureau, Historical Income Tables Table P-40: Women’s Earnings as a Percentage of Men’s Earnings by Race and Hispanic Origin, 2016

7) Social Security Administration, Fast Facts and Figures About Social Security, 2016

8) http://fortune.com/2016/05/11/sallie-krawcheck-ellevest-launch

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