Women Making More Than $100K Are Stressed About Money: 3 Proactive Steps To Take
Written by
Gabrielle Olya
Edited by
Amber Barkley
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Most women are stressed about money — even if they make a high salary. A new Fidelity study found that overall, 57% of women are stressed about their finances, and 93% are stressed about managing their money. That high latter percentage held true no matter what income bracket women fell into — 93% of women who earn less than $50,000 are stressed about managing their money, 95% of women who earn between $50,000 and $100,000 are stressed, and 92% of women earning over $100,000 are stressed.
In this “Financially Savvy Female” column, we’re chatting with Lorna Kapusta, head of women and engagement at Fidelity, about why high-earning women are stressed about money management and the proactive steps they can take to reduce this stress.
What are some possible reasons that so many high-earning women are stressed about money management?
It’s not about how much you make or have — what we found is that the key to minimizing financial stress is being engaged and taking action. That’s one reason why high-earning women continue to be stressed. Even though they’re bringing in $100K [plus], they might not be making money moves. We work so hard for our money, so it’s important to make our money work as hard as we do.
What proactive steps can women in this salary bucket take to reduce stress around money management?
The one area that makes the biggest difference with stress is taking financial action. Women who indicated they made money moves in the past six months felt less stress managing their money than women who didn’t. Our research identified three money moves that make the biggest difference when it comes to decreasing financial stress: saving for emergencies, saving for retirement and thinking ahead.
Saving for Emergencies: Financial stress levels drastically decrease with each additional month of emergency savings set aside. Our data found that setting aside just one month of expenses in case of emergency decreased financial stress levels.
Start your emergency savings if you haven’t already. Aim to build $1,000 or one month’s worth of essential expenses, whichever is greater. If you have one month’s worth, keep adding to it as much as you can. Even a little bit can make a big difference. In total, Fidelity recommends having three to six months’ worth of expenses set aside to cover emergencies.
Saving for Retirement: Small increases in retirement savings can lead to big results when it comes to financial stress. Nearly 3 in 5 women (59%) who save up to 2% of their household income for retirement feel a fair amount or a lot of stress. Once women save between 10% and 14%, only about 3 in 10 women (32%) indicate similar stress levels.
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Fidelity recommends saving at least 15% of your income for retirement, including an employer match if you have one. If that feels unattainable, just start with what works for you, and try to add 1% annually until you get there.
Thinking Ahead: Taking the time to outline your financial goals and needs for the next few months can lead to less financial stress. More than 7 in 10 (73%) women who only think ahead a few days feel a fair amount or a lot of stress. Once women plan for a few months ahead, that number drops down to less than 4 in 10 (38%).
Creating a budget is a great way to get a sense of your current financial situation and plan for the future. Start by understanding your essential and discretionary expenses, your take-home pay and your interest rates. From there, use this information to create a budget based on your actual spending and saving activity to see what you may need to change or continue to stay on track to meet your financial goals.
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