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  • Writer's pictureMalissa Marshall, CFP®, MS Tax, EA

Financial Planning for Women by Life Stage

Updated: Aug 24, 2023

As women, we have unique needs and challenges when it comes to managing our money.

According to gender pay gap data released in 2022, a working woman earned only 82 cents for every dollar her male counterpart earned. Further, the median annual earnings for women were almost $10,000 less than for men.

Because we typically earn less than our male counterparts, it’s even more important that we understand how to capitalize on our money’s potential to the best of our ability.

Most personal finance information has been tailored to the male demographic, so to be able to feel confident about your finances, no matter your age, relationship status or field of work, is vital. Having confidence in your financial situation as a woman will help you stress less and enjoy life more regardless of where life takes you.

In this article, we’ll explore financial planning for women throughout stages of life many of us or our friends may encounter over the course of a lifetime.

Financial Planning as a Single Woman in Your 20s

If you’re just starting out in your career, there are many ways to set yourself up for financial success in the future.

The first building block to achieving financial success is to set up a budget, or spending plan, that fits your needs. A budget doesn’t have to be boring, cut and dry, or rigid, but rather can be viewed as a way to make your money work for you and your short- and long-term goals.

There are several different budgeting methods, but one of my favorites is the tracking method.

First, you need to know what income you have coming in (net income, which is after all taxes and deductions) so you can understand how much money you can spend each month.

Then by syncing your accounts to a budgeting program (such as You Need A Budget, Quicken, or Mint), you’re able to see what you’ve spent your money on and when. A lot of these programs will automatically categorize your spending for you, so you just need to sign in to take a peek and make sure it’s categorized correctly.

Once you’ve linked your accounts to an automated system of your choice, you can then start to track your spending over the course of the next month or two. From here you will have a better idea of where all your money is going and if there’s anything that doesn’t look right. A lot of times there will be subscriptions or other expenditures that you didn’t realize you were still paying for.

After you’ve set up your system and gone through your expenses for a few months, you can then determine what needs to be eliminated or cut down. By taking your net income and subtracting your fixed expenses, such as rent/mortgage, car, student loan payments or any other fixed expenses, you will determine how much money you have left over to use towards variable expenses such as groceries, alcohol and bars, dining out and shopping.

This is when you can focus on the budgeting aspect. Online budgeting tools may allow you to set budget limits for categories so you can track your spending progress as the month progresses. From here you can look at your spending trends as the months go by and adjust your categories accordingly.

Why budgeting? The great thing about learning to set up a budget early on in your career is that you will be more capable of being able to set and reach short and long term goals, stay out of consumer debt and plan for an emergency.

Once you have a budget set up, you can start setting money aside in an emergency fund, which is ideally 3-6 months’ worth of expenses (or more) in the event you were to lose your job or have a large unexpected expense come up.

From there you can start to set up additional savings accounts designated just for a specific goal such as home, vacation, car, etc. This way you aren’t dipping into your emergency savings when you need to spend money in one of these other areas.

Another important piece to consider in your early 20s is setting up a retirement account if you haven’t already.

Once you’ve started working after college you can set up a Roth IRA and start funneling post-tax money into it. The great thing about Roth IRAs is that they allow you some flexibility for taking money out for a first time home purchase or education costs. It’s easier to automatically have your money sent to investments before you can get your hands on it and spend it, so I recommend doing this as soon as you’re able before you get too used to extra money in your bank account.

Roth IRAs can be set up on many different platforms, but Fidelity and Vanguard are very user friendly and each has their own low-cost index funds to consider.

If you’re worried about setting up your own investment account, you can seek out a financial advisor who can help assess your financial situation and lead you in the right direction.

Your Career & Financial Planning as a Woman

Once you start a job at a company that offers employee benefits, it’s time to learn more about what this means for your financial future.

Many companies will offer health, dental and life insurance, but also have perks that you may not have realized such as counseling, financial coaching, and health coaching. By taking advantage of these perks that are offered through your company you can save on any money you would have spent out-of-pocket on these same benefits.

When you sign up for an employer-sponsored health plan you may also have access to a Flexible Spending Account (FSA), or Health Savings Account (HSA), which allow you to set aside dollars pre-tax for qualified medical expenses. Utilizing these accounts will lower your tax liability for the year.

In addition, it’s likely that your employer will offer you an employee-sponsored retirement plan in which you can contribute pre-tax dollars. This means that this money will be withheld from your paycheck and automatically put into your retirement account through work. The great thing about these types of plans is they help you automate your savings and reduce your taxable income at year-end tax time.

As soon as you’re able to do so, start contributing into your retirement plan through work so you can take advantage of compound interest. If your employer offers a match, which many do, be sure to invest at least the amount needed to qualify for the match. A match is free money from your employer that you don’t want to pass up.

What about when you earn a raise or get a promotion at work? First off, congratulations! This is a huge accomplishment and one you should celebrate.

But before you get too carried away, make sure you don’t fall victim to lifestyle creep. Lifestyle creep is when you start making more money and you automatically start upgrading your lifestyle to match your new income. It could be purchasing a new car, buying a nicer or larger home, updating your wardrobe, etc. By falling victim to lifestyle creep you will be reducing your chance to save and invest more money when you get the opportunity.

How to Have the Money Conversation With Your Partner Before Marriage

So now you’ve gotten engaged. Another congratulations is in order!

Whether you’re already living together, thinking about moving in together, or waiting until you’re married to do so, it’s important to have a money conversation before you get too far down the line.

Money is one of the most common reasons why couples argue, and also one of the main reasons couples end up getting divorced.

There are a few things you will want to discuss with your partner about money. The first is whether they tend to be a saver or a spender. If one of you is a spender and the other is a saver, then that will likely be a contention point in your relationship. Understanding each other’s unique money story, including how money was viewed within your family as you grew up, as well as how you tend to handle stressful situations will help you understand why each of you is the way you are when it comes to saving and spending.

Another important thing to discuss is what your short- and long- term goals are as a couple and how this will affect your finances. By having these types of conversations before you get married, you’ll be better prepared to handle disagreements about finances as time goes on.

Financial Planning When You're Married

Now that you’ve discussed your money stories and goals for the future, it’s time to determine how you want to manage your finances as a couple.

Do you want to have separate accounts and split bills down the middle? Do you want to have separate accounts and a joint account to pay bills out of? Do you want to fully combine your finances?

Whatever you decide, both partners need to be on board in order to set yourself up for a successful financial future. Whether you decide to split or combine finances, you may want to use an online app to link all of your accounts. This way you’ll have a good overall picture of your finances as well as the micro view of what’s coming in and what’s going out each month.

Regardless of what system you choose to pursue, communication is the biggest factor in determining if you’ll be able to keep the peace and meet your financial goals together. Setting up regular money dates, a specific day and time in which you will review your finances, will ensure that you are on the same page regarding your goals, budget, bills, debt and any other financial pieces that need to be discussed.

Regular communication will help you see your finances from the other person’s point of view and ward off disagreements before they have the chance to get out of hand.

Financial Planning for Divorcing Women

If you find yourself in the situation of divorce, then handling your finances can become a bit more complicated.

According to this survey conducted by Worthy in partnership with the Association of Divorce Financial Planners (ADFP), 3 of 10 women were not familiar with retirement savings and 4 of 10 were not familiar with investments pre-divorce. Now is the time to get educated on your finances and work to maintain a sense of control over your money as much as possible.

It’s as important now to create or keep tabs on your budget as it has even been, but also know that there will likely be unexpected expenses that come up during the divorce process that you will have little control over. The important thing is to control what you can, and not make any major or unnecessary purchases in order to conserve cash throughout the process.

There are several steps to take through the divorce process to help you maintain financial stability including:

● Figuring out health insurance if you will no longer be covered by your spouse

● Separating out and closing joint bank accounts

● Applying for a new credit card only in your name

● Updating your beneficiary information

● Creating a new estate plan

You will also want to take a look at your retirement plan to determine what needs to be updated to meet your retirement goals. Keep in mind if you have been married 10 years or more you will be eligible to collect on your spouse’s social security benefits at retirement.

Going through a divorce can be emotionally, mentally and physically draining and can also drain your bank accounts. If you’re not already working with your own financial coach or financial advisor, now is a great time to seek advice from a trusted professional as you navigate this complex process.

You may want to hire a financial advisor who is a Certified Divorce Financial Analyst (CDFA) with the experience to help navigate common and complex financial issues that arise in a divorce.

And once you’re through the divorce process, working with a financial advisor may be an ideal guide to help you feel confident and optimistic for your future.

Financial Planning for Widowed Women

As of 2019, there were approximately 11.4 widows living in America. Although it’s not surprising to most that women tend to outlive men, half of widows over the age of 65 will outlive their partner by 15 years or more.

If you find yourself in this situation, it will undoubtedly be some of the most difficult days, weeks and months of your life. Losing a partner is incredibly difficult, and having to face decisions alone, many of them financial, can seem completely daunting.

The most important thing is to take care of yourself and your own needs first, and take baby steps when it comes to any financial checklists you need to get through to avoid overwhelm.

When it comes to managing your finances as a widow, there are several things you need to take into account.

The first is to go through your finances and do a quick audit of what you’re paying for that you no longer need (such as any subscriptions that your spouse had that you won’t be using) and make sure there aren’t any bills you may have missed or coming due that aren’t already on autopay. You’ll also need to evaluate any benefits you’ll be receiving, such as social security, and how that factors into the new monthly income you have to live on.

After you have a handle on the day-to-day financial situation, you can then move on to the bigger picture.

If your spouse racked up any debt, you’ll have to determine if you’re liable for it. If debts include federal student loans, they are forgiven, but some private loans may not be. If you have co-signed on the debt or are a joint account holder (not just an authorized user), you will likely be responsible for any debt your spouse had acquired while you were married.

You’ll also need to figure out what financial accounts your spouse had and how you’ll be transferring the assets or closing the accounts out if applicable. It’s recommended however that you keep a joint bank account open for at least a year after your spouse’s passing to be able to deposit any checks in their name that come to you.

If your spouse had life insurance, you’ll need to decide what to do with the benefit, although you don’t need to decide right away. In the meantime you can transfer the benefit to a savings account and then consult with a trusted financial advisor on what makes the most sense when you’re ready to do so.

Your advisor can also help you evaluate your own retirement plan and what may need to be adjusted as you move forward on potentially less income.

While grieving, you may want to get everything done as quickly as possible, or may lack the energy to even open the mail. It’s important to not rush into any financial decisions and consider having a trusted financial professional in your corner who can help you navigate this new and uncertain time.

Retirement Planning for Women

Because women typically live longer, yet earn less over their lifetime, retirement planning for women needs to look differently than it does for men.

As women tend to be the primary caregivers for their own children as well as aging parents, they are likely to spend an average of 12 years outside of the workforce. This in turn means losing hundreds of thousands of dollars in lost wages and social security benefits over a lifetime.

So what does this mean for you?

Lost wages mean you could have less to put into your retirement account over your working years. This, coupled with lower social security benefits, means you could have less to live off on in retirement.

By taking this into account, women can plan early to set themselves up for a retirement in which they can live comfortably. Although it can be hard to plan for whether you’ll take time off when having children or who will take time off work to care for an elderly family member, it’s important to start thinking about it and plan as soon as possible for your future.

By meeting with a qualified financial advisor you can assess where you are financially and where you want to be when you retire. By saving and investing consistently, you can meet your financial goals in the future.


Because women tend to earn less over their lifetime and invest more conservatively than men, it’s important to take our unique needs and challenges into consideration when it comes to financial planning. Whether you choose to manage your money on your own or hire a financial professional, these tips by each stage of life will help you move towards your financial goals.

Disclaimer: This article is intended for informational purposes only, and should not be considered financial advice. Before making major financial decisions, please speak with us or another qualified professional for guidance. The original version of this article first appeared on Wealthtender written by Katie Oelker.


Image by bady abbas

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