Many advisors are seeing more young women across their desks. Here are five hurdles they face and ways you can help them succeed financially.
#1 Debt: pay it down.
A report compiled by CareOne Debt Relief Services shows 45% of women in the U.S. who are seeking debt relief owe more than $50,000. That’s a 33% jump from stats taken two years prior. Whether student loans or living off of credit cards, debt is rising at a crushing rate. For clients with multiple cards, choose one to conquer and cut it up. Then pay that balance to zero and move to the next. Choose the card with the lowest balance first. This gives the client a victory over debt and amps them to take on the next challenge.
Read: Help clients pay off debt
#2 Retirement: they’re not saving for it.
For Gen Y clients, retirement seems a long way off. But women live longer than men, and many are choosing to remain single. So impress upon them that they may have to accumulate their retirement savings solo. And, just because changes to CPP and OAS mean we’ll all be working longer, that doesn’t mean retirement preparations should be delayed.
Read: Retirement planning more important for women than men
#3 A business: start one.
With jobs scarce, many young women are creating their own. Take Sara Blakely, America’s youngest female billionaire and the creator of Spanx. She took $5,000 and an idea to craft her own success.
It’s your job to ensure they keep business and personal finances separate, including setting up holding companies, trusts and other shelters that prevent a business failure from leaving them broke. If enough clients are choosing this path, it also makes sense to widen your professional circles to include entrepreneurial advisors, tax specialists, and those who can provide or arrange seed financing.
Read: Protect entrepreneur clients
#4 Money isn’t romantic: Talk about it anyway.
Money can be a sour subject for young couples, but it’s your job to make sure both parties attend financial meetings, and help keep things transparent. If couples mingle finances, make sure the woman has accounts and savings in her own name and make sure both parties understand their own finances enough to control them if they have to go it alone.
Read: How to help couples who disagree
#5 Emergency fund: have one.
This is sometimes the hardest thing to save for. You don’t see an accident coming; you just see the car you can’t afford to replace once it’s been totaled. Stress to young clients this doesn’t need to come in the form of a million-dollar life insurance policy. It can just be a few thousands tucked away for a rainy day.