Month: January 2021

By Fidelity Viewpoints

What causes stress in your life? New Fidelity research finds “my job” is the #1 answer for both men and women. But for women of all backgrounds, the next biggest anxiety producers are health and money.

More than 85% of women are stressed about their finances, and 60% are stressed about both their money and their health.¹ The major triggers for that stress are life events, led by divorce, followed by when children leave the nest—and move back in.

“These are times when stress goes through the roof,” says Kathy Murphy, who leads Personal Investing at Fidelity. “But our research shows that a few key financial building blocks can have a great impact on reducing financial stress and even improving your health.”

Women: Demand more from your money and health webcast

To help women boost confidence and find the courage to make important money, health and life decisions, Fidelity has produced a new webcast: Women: Demand more from your money and health. The webcast features panelists Gayle King (moderator), journalist and CBS This Morning anchor; Kathy Murphy, Head of Personal Investing at Fidelity Investments; and Mindy Grossman, CEO of WW (Weight Watchers).

Throughout the webcast, the panelists talk about the struggles they’ve faced with their own wellness, challenges they’ve overcome, and helpful tips for women of all ages to help reduce stress and anxiety while managing their busy lives and families.

3 strategies to reduce financial stress

What can you do to help improve your financial security and overall wellbeing? The women in our survey who aren’t stressing out over money and health share 3 secrets to success.

1. Build an emergency fund of at least 6 months’ of expenses so you can weather the unexpected

Are you financially stressed? 7 telltale signs

1. Missing work
2. Difficulty thinking clearly
3. Depression
4. Sickness
5. Gaining weight
6. Not exercising enough
7. Not taking vacation

In everyday life, stuff happens. The roof leaks. The car breaks down. The kids need a cash infusion. That’s why it’s critical to have an emergency fund, no matter your life stage, gender, marital status, or income.

Overall, Fidelity research finds that less than half of Americans have an adequate emergency fund. Our stress-free ladies break the mold: 77% have one.

If you don’t, here are 3 simple steps to get started:

• Look for ways to cut down on nice-to-haves like eating out or buying that extra pair of shoes.
• Put savings on autopilot. Set up regular withdrawals from your paycheck to a separate rainy-day fund until you reach your goal.
• Explore a side gig to supplement your income.

Tip: Save a little bit each week or month until you reach that 6-month target and then you’ll feel better about the unexpected.

2. Save at least 10% of your income a year so you are prepared for retirement

Taking care of your future self is as important as making time for yourself today. It can give you peace of mind too. Of the financially-zen in our survey, 29% say they have been saving at least 10% for retirement year after year.

To be confident you’ll have enough money to maintain your lifestyle in retirement, Fidelity recommends aiming to save 15% each year—but that includes any contributions from your employer. If you are fortunate enough to have one who matches your contributions in a 401(k) or 403(b) retirement account, grab it. That is like free money! And invested well, that money can grow over time.

This year you can contribute up to $19,000 to a 401(k) or 403(b)—and save on taxes too. No 401(k) at work? No worries. You can contribute up to $6,000 a year to an IRA (short for individual retirement account). Lastly, if you’re over age 50, you can contribute even more with catch-up contributions.

Tip: If you cannot save 10% or 15% at first, try to save at least enough to receive the full employer match at work. Read about all 4 of Fidelity’s retirement saving guidelines: Retirement roadmap.

3. Have a financial plan

Ready to take the first step?

Here are a few key elements of a strong financial plan:

• An emergency fund
• A budget
• Paying down debt
• Health and disability insurance
• Saving and investing for retirement
• Saving and investing for college
• Saving and investing for shorter term goals like vacations or a home purchase
• Wills and estate planning

Planning for life’s goals—a new house, a vacation, your retirement—is likely on your to-do list. But have you taken the first step?

While 72% of women surveyed say they want to begin a financial plan, only 52% are confident about doing so. Worse yet, 40% of all women say they lose sleep over money matters.

Our financially stress-free women know the power of planning for the life they want and deserve: 95% have some kind of financial plan in place, and 80% have a long-term plan.

Why you need a plan

Don’t think you need a plan? Well, think again.

“Most women will be the sole decision-maker in their household at some point in their lives due to divorce or death,” says Murphy. “So it’s important that women understand the fundamentals of managing their money. By taking a few positive steps and having these 3 essential financial elements in place, you can make your money work for you—as hard as you work for your money.”

So take the first step toward a financially stress-free life by beginning your plan. If you’re a do-it-yourself type, a good place to start is the Planning and Guidance Center, where you can set goals and strategies to create your plan. If you prefer to work with a professional, call us. We can help.

2 “life lessons” from Mindy Grossman and Kathy Murphy

Find a purpose. Build your brand. Simplify.

My mom didn’t finish high school and she got married to my dad very young. All they wanted was a child – they tried for 12 years without success and they could not afford to adopt. My father worked nights in the produce business and one night he went to work and his boss, who loved him, walked up with an envelope and gave him the money to adopt a child. 

I am that child. 

At that time, in 1957, it was thousands and thousands of dollars to adopt a child. When I absorbed that, I told myself that I never want to be in a position to not be able to afford something that’s so critical to my life and my journey. I want to be the one who can give the gift versus needing the gift. And it made me very responsible at an early age, and probably more serious than I needed to be. Because I felt that if I had been given that gift, I had to use it for a purpose. 

That event shaped my life since I was a small child—in terms of feeling responsible for myself, identifying those things in life that were going to be important to me and creating the path to get there. And being very focused and very discerning in what I decided to do, or not to do. 

That mindset still rings true for me to this day. I think that what you decide to say “no” to is almost, if not more important, than what you decide to say yes to—whether those decisions are about work, life, family, or money. It was very, very important that it was purposeful. 

At WW, we have a purpose filter for everything we do as a brand. As a person, you have to think of yourself as a brand, as well. I think everyone needs their own purpose filter that you can look through and say “What is the choice I am making today that’s in pursuit of my ultimate goal?” 

We are all so busy, have so many things coming at us and so many competing priorities. To deal with the noise out there, you have to simplify and filter things down to what is your own personal truth of what is truly important at any given moment in time. Given that stress can be heightened when it comes down to financial decisions, health decisions or family decisions, it is even more important to simplify.

Build confidence. Get educated about investing.

My dad died unexpectedly of a massive heart attack when he was 57, and my mom was 54. I was 26 and the middle child of 6 children, with 3 still in college. My mom was a nurse. We had the traditional division of labor. My mom paid the bills, and my dad did the investing. So when my dad died, my mom had no idea what to do. How was she going to pay to get these 3 kids through college? How long was she going to have to work? How were we going to make it as a family? 

I watched what she went through, and I said this can’t keep going on like this. But 30 years later, we haven’t really broken the cycle of what women versus men focus on in a relationship. Still today, women control 80% of the purchase decisions in their household, ² yet only 9% of women think that they can invest as well as men. ³

Why? 

I think it’s a lack of confidence. And so first of all, I think that financial services—and this is no one’s fault—but it was an industry that was created by men, and it was created in the image of what they knew, and how men invested a long time ago. And so, the topic is intimidating, or boring. 

I take our clients’ issues as personally as they do. We want them to succeed. And too often, women start too late, or don’t know until their husband passes. So my mom was not unique, 9 out of 10 women will be the sole decision-maker in their household due to divorce or death⁴ —that’s why it’s really important that women have an understanding of investing. The fundamentals aren’t hard, and there are ways that you can just get enough information to have better control of your future.

Key takeaways

• Many women who feel financially secure and stress-free say they have put a financial plan in place.
• Women who annually save 10%-15% of their income in tax-advantaged savings accounts like traditional 401(k)s and IRAs are generally on track to meet their retirement savings goals.
• Having an emergency fund of at least 6 months’ of necessary expenses can help reduce stress and bring peace of mind.