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
- Missing work
- Difficulty thinking clearly
- Gaining weight
- Not exercising enough
- 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.
3. Have a financial plan
Ready to take the first step?
- 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
Next step to consider
Talk to a Fidelity representative about your financial goals, and get help developing a plan to achieve them.