Life-changing events that influence women’s financial decisions

Throughout a woman’s life, she may play many roles—employee, supervisor, partner, mother, and more. At each stage, her responsibilities and priorities — including how she views and manages her finances — are likely to change. 

A recent study by Zeldis Research Associates for Equitable looked at how women’s attitudes and actions toward their finances are shaped by their relationship status over their lifetimes. It found that there are pivotal moments in a woman’s life that influence her level of involvement in managing her finances. 

Overall, despite reporting improved financial knowledge, women at all stages of life reveal having less confidence in their ability to handle their long-term finances and achieve their financial goals. That gap exists regardless of their age, income, or level of financial assets; however, it does change over time. Women’s confidence in their ability to meet their financial goals grows as their involvement in financial decision-making expands.

Nearly all study participants — 9 in 10 women —are involved in their day-to-day finances, but only 47% reported they were involved in retirement planning and even fewer, 41%, said they were involved in investing. The tendency for women to focus on short-term financial activities can limit the time needed for planning ahead. Thus, it likely contributes to women’s concerns about achieving long-term financial goals and managing their finances overall. However, as roles and responsibilities change throughout life, women's willingness to take action on their finances increases as well. 

Pivotal moments that encourage financial engagement

Life experiences and career achievements compel women to become more involved with their finances. One of the most influential pivotal moments for women is becoming “uncoupled”– either divorced or widowed. That change in relationship status can significantly decrease confidence in their ability to meet financial goals, regardless of current financial situation. 

These relationship changes frequently spur women into taking a more active role in their finances. The study found that 71% of divorced women and 74% of widowed women reported that they had become more involved in financial decision-making after their change in marital status. 

The experience of one divorced participant illustrates how becoming unmarried can also change a woman’s perspective on money, investing, and financial planning. “There was only one income and I had to learn how to get back up on my feet. It was not easy, and it took a couple of years to get to where I am now.”

Relationship status isn’t the only motivator for women to become more financially proactive. As women look toward retirement, they’re also more likely to increase their involvement in financial decision making. The need to plan for retirement was given as a top reason for increased involvement by 26% of Gen X women and by 45% of women Baby Boomers. 

Not surprisingly, earning more money also proves to be a catalyst for more engagement in financial decision making. In fact, among single, never-married women, getting a raise is the primary reason they become more involved in finances, as cited by 51% of survey respondents. Similarly, becoming a parent spurred many women to become more involved in managing their money.

Increased involvement improves confidence

Whatever the inspiration for becoming more involved in financial decision-making, doing so has a positive impact. The study found that as women become more involved in their finances, they tend to grow more confident in their capabilities. This confidence improved how they view their likelihood of achieving financial goals. Therefore, it is not surprising, that 2 in 3 women said they wished they had started paying closer attention to their finances earlier—a number that holds steady regardless of women’s’ relationship status. 

The research also revealed that married women lagged their peers in financial decision participation. As evidenced by one-third of married women, regardless of their age, reporting that they do not feel they are fully involved in financial decisions. Further, women who are married are also the least likely to say that they have become more involved with finances and financial decisions over time - just 58%. Comparatively, women who are single (71%), divorced (70%), and widowed (67%) are more likely to report increased involvement. 

Despite this gap of involvement among married women, many do understand the need for inclusion in financial decisions. As one married respondent explained, “I think it is important that women understand finances. In a marriage, a woman and her husband should be equal partners in terms of managing money and finances.”

Conclusion

As women’s lives become more complex, whether due to changes in their relationship status, adding children, or any other path their lives may take, many feel the need to improve their own financial knowledge and become more involved in managing their finances. That increased involvement is linked to greater confidence and belief in their ability to achieve their financial goals. As the saying goes, "knowledge is power," and women are finding that building financial acumen and increasing involvement in financial planning enhances their financial strength and wherewithal, preparing them for a more fulfilling life.