That’s a problem, because “women are particularly at risk for financial insecurity,” concludes a comprehensive study from Utah State University researchers published in the Journal of Financial Counseling and Planning.
But the study also reported some good news.
The Aha! moment
The researchers found that women at risk are motivated to make profound financial changes when they encounter a “significant life event” such as marriage, divorce, having children, entering or leaving school, moving from one location to another, or loss or gain of employment.
“Major life changes like a premature death of a spouse or divorce are often the wake-up call to people to reassess their lives,” said Utah State researcher Jean Lown.
Their study showed that most women making major financial changes did so as a result of experiencing that “Aha!” moment, when events force them to confront the damaging financial path they are on and make positive changes for the future.
The first step toward a new financial life
What’s the first thing most women need to do to take a positive step forward?
The study found that it was preparing a personal financial review, where “participants looked at their debt, income, savings (if any), expenses, and evaluated their financial situation in relation to their personal goals.”
Here’s what one study participant said:
“Adding up what I spent in the month, looking at the debt-to-income ratio, and just seeing the numbers in black and white on the paper was a real eye-opener for me…”
Another study participant confessed that this was the first time she developed a budget “in nearly 18 years of marriage.”
Making powerful changes
The Takeaway: Women can make dramatic and powerful changes to turn their financial lives around. But usually those changes are motivated by significant life events which call into question their past financial behaviors and decisions.
The first step toward a successful turnaround? A personal financial review which reveals exactly where they stand.
We’ve worked with women clients for over twenty years and know that it isn’t easy to change your life, especially when it seems to be in shambles after the death of a loved one, a divorce, a wrenching job loss, or another traumatic event. But the Utah State study suggests that change is absolutely possible once you start by taking the first step to turn things around.
To our readers: We would love to hear your stories about how you made positive changes in your financial life! Please share them with us!