From landing a first job to settling into retirement, a woman's life is filled with many significant financial milestones. Women not only tend to live on average about five years longer than men, but they also more commonly encounter unique challenges, such as balancing careers with motherhood, caring for aging parents and navigating divorce where they are not the primary earner.¹ These life events, among others, require thoughtful financial planning. As women have made more and more advances in modern U.S. history when it comes to accruing and handling wealth, the opportunities for building personal investments and generational wealth are greater than ever. Understanding this opportunity and the potential hurdles life might throw at you can go a long way.

Below we will explore common financial milestones that women often encounter and discuss ways to approach them with more confidence and ease.

Negotiating a better salary

Negotiating a better salary is a crucial skill for anyone in the workforce, but particularly for women, who historically have faced wage disparities compared to their male counterparts. Despite progress in recent years, the gender pay gap persists, with women still making on average 84 cents to each dollar earned by men.²

Salary negotiations can be key in helping women to improve their own financial standing. While it is natural to feel apprehensive when entering these conversations, approaching salary negotiations strategically can help ease those anxieties.

Start by researching the going rate for your position, compiling a list of your achievements and highlighting key projects or initiatives that support the value you've contributed to the company. Be open to different forms of compensation – sometimes a raise may come in the form of equity, paid time off or flexible work hours instead of cash.

Enter the conversation armed with data and facts to support your case. Having a gauge for what similar professionals in your industry are paid, as well as the range for what comparable roles on your team or company are paid can be helpful information to have on hand. And remember, never feel guilty or apologize for asking for what you're worth. You work hard, and you deserve to be valued accordingly.

Setting up a financial plan

A financial plan is comprised of many aspects, including budgeting, investing and saving for various goals, like retirement. Creating a financial plan early in your career is an optimal time to do it, as it often coincides with having steady income and paying recurring expenses such as insurance, groceries, rent or clothes. It’s never too late to start, but the earlier you begin saving and investing toward short- and long-term goals, the better.

The value of budgeting

Budgeting can be a valuable exercise for women seeking to achieve financial independence and stability. Creating a budget is often the first step in the financial planning process, allowing tracking of income and expenses, identifying spending patterns and making informed decisions about where to allocate resources. By establishing a clear budget, women can ensure they are living within their means while also setting aside funds for savings and investments. This financial discipline not only helps in managing day-to-day expenses but also in building an emergency fund to cover unexpected costs, providing peace of mind and financial security.

Investing toward retirement and beyond

It is essential for women to focus on building a robust retirement plan, which may include contributing to retirement accounts such as a 401(k) or IRA. As women tend to live longer than men and may spend more than 20 years in retirement, early planning and saving are particularly important. Consider investment strategies that align with their risk tolerance and financial goals, since the compounding nature of investing can be a powerful tool for wealth accumulation over time. It is also important to address insurance costs, such as health and life insurance, to protect against unforeseen events. Seeking professional financial advice can be beneficial in creating a personalized financial plan that takes into account individual circumstances and aspirations. By taking charge of your financial future, you can build a strong foundation for themselves and their family, ensuring they are well-prepared to navigate life's challenges and opportunities independently.

Preparing your finances for marriage

Getting married is an exciting milestone, but before tying the knot, it is crucial to prepare your finances for marriage. When planning finances for a marriage, women should consider a comprehensive approach that addresses both immediate and long-term financial goals. Open and honest communication with a partner about financial expectations, spending habits and shared goals is essential. This dialogue can help establish a joint budget that accommodates both partners' needs and aspirations, while also setting the stage for a successful financial partnership. It's important to discuss how expenses will be shared, whether accounts will be combined or kept separate, and how financial decisions will be made. By aligning on these key issues, couples can build a strong financial foundation that supports their marriage. It’s a lot easier to have these conversations and settle any differences before you get married than after you’ve signed the marriage certificate.

In addition to everyday financial planning, women should also consider the legal and financial implications of marriage, including the potential benefits of prenuptial and postnuptial agreements.

Prenups and postnups

A prenuptial agreement, established before marriage, can outline the division of assets and financial responsibilities in the event of a divorce. This agreement can provide clarity and protection for both partners, particularly if one or both have significant assets, debts, or children from previous relationships. Similarly, a postnuptial agreement, created after marriage, can serve the same purpose and may be useful if financial circumstances change significantly during the marriage. While discussing these agreements may seem unromantic, they can offer peace of mind and help prevent conflicts in the future.

The possibility of divorce

While no one enters a marriage expecting it to end, being prepared for all outcomes, including the possibility of a divorce, is a prudent approach. Women should be aware of their financial rights and responsibilities in the event of a divorce, including the division of marital assets, potential alimony and child support arrangements. Maintaining financial independence and having a clear understanding of personal and joint finances can empower women to navigate the complexities of divorce, should it occur. By planning for both the joys and challenges of marriage, women can ensure they are well-equipped to manage their financial futures, regardless of the path their relationship takes.

Divorce can happen at any age, and therefore have different impacts. For example, a divorce that occurs earlier in life might heavily involve child care and education savings conversations, while a divorce that occurs later in life – colloquially referred to as a “gray divorce” – can have lasting impacts on a woman’s retirement or estate planning situation.

Preparing your finances for having a family

Planning for children is a significant life decision that involves careful financial and logistical preparation. Children are expensive, and women who have roadblocks around fertility may incur even more costs in planning for and getting pregnant. Planning for maternity leave and child care costs should be factored into your budget and financial plan.

Fertility planning

The reality is that many couples struggle to conceive naturally and end up requiring medical assistance to become pregnant. For some families, the journey begins with considering fertility treatments, which can be both emotionally and financially demanding. Treatments such as in vitro fertilization (IVF) or intrauterine insemination (IUI) can be expensive, and insurance coverage for these procedures varies widely. Prospective parents should thoroughly review their insurance policies to understand what is covered and explore alternative financing options, such as payment plans offered by fertility clinics or specialized medical loans. Setting up a dedicated savings account for fertility-related expenses can also help manage costs and alleviate financial stress during this process.

Planning for maternity leave

Once pregnancy is achieved, planning for maternity leave becomes a priority. Understanding the maternity leave policies of one's employer, including the duration, whether it is paid or unpaid, and any additional benefits, is essential. Women should also familiarize themselves with state and federal leave policies, such as the Family and Medical Leave Act (FMLA), which provides eligible employees with unpaid, job-protected leave for specified family and medical reasons.³

Financial planning for maternity leave may involve saving in advance to cover any income gaps, budgeting for additional expenses, and considering short-term disability insurance to supplement income during this period.

Child care expenses

Whether you hire a nanny or enroll your child in daycare, child care costs can quickly add up, so working them into your financial plan as soon as you have an idea of how much they might cost you is key.

Many new parents don’t think about the impact child care costs can have on their cash flow until they start spending on that expense. One way to plan for the impact on cash flow is to start saving before child care costs start up so that when the expense is paid, it is already part of your cash flow needs.

Education planning

When your baby is brand new, it’s hard to imagine them heading off to college, but once they do, you’ll be grateful that you had started contributing to an education fund early on. College is only becoming increasingly more expensive, but investing early and often in a 529 plan can help offsite the eventual cost.⁴ 529s are potentially very beneficial because they grow tax free and can pay for items that extend beyond classes alone, such as for dorm rent, books or other school supplies.

Caring for aging parents

Caring for aging parents is a responsibility that many women find themselves undertaking, often balancing this role alongside their own personal and professional commitments. This responsibility brings both financial and emotional challenges that the "sandwich generation" knows all too well. One of the first steps is to assess the needs of the aging parents, which may include medical care, assistance with daily activities, and emotional support. Women should engage in open conversations with their parents to understand their preferences and expectations, as well as to discuss important topics such as health care directives, living arrangements and financial planning.

Financial considerations are a significant aspect of caring for aging parents. Women may need to evaluate their parents' financial situation, including savings, insurance coverage and any government benefits they may be eligible for, such as Social Security or Medicare. It's important to explore options for covering health care costs, long-term care and potential modifications to the home to accommodate mobility or accessibility needs. In some cases, women may need to contribute financially to their parents' care, which requires careful budgeting and planning to ensure their own financial stability is not compromised.

Balancing caregiving responsibilities with work and personal life can be challenging, and it's crucial for women to seek support and resources to manage this balance effectively. This may involve enlisting the help of other family members, hiring professional caregivers, or utilizing community resources such as adult daycare centers or respite care services. Employers may offer flexible work arrangements or family leave policies that can provide additional support. It's also important for women to prioritize self-care and seek emotional support from friends, support groups, or mental health professionals to prevent caregiver burnout.

Estate planning

Estate planning is another critical aspect of financial planning for women. Despite its importance, estate planning is often overlooked or delayed. For women, taking proactive steps in estate planning can offer peace of mind and financial security for themselves and their families.

The estate planning process typically begins with creating a will, which outlines how assets will be distributed upon death. It's essential to regularly update the will to reflect changes in circumstances, such as marriage, divorce, or the birth of children, to ensure that it accurately represents current wishes.

In addition to a will, women should consider other key components of estate planning, such as establishing a durable power of attorney and a health care proxy. A durable power of attorney designates someone to manage financial affairs if one becomes incapacitated, while a health care proxy appoints someone to make medical decisions on one’s behalf. These documents are crucial for ensuring that trusted individuals can act in their best interests if they are unable to do so themselves. Women may also explore setting up trusts, which can offer more control over asset distribution, minimize estate taxes and protect assets from creditors.

Estate planning also involves reviewing and updating beneficiary designations on accounts such as life insurance policies, retirement plans and investment accounts. These designations take precedence over a will, so it's important to ensure they align with overall estate planning goals. Women should also consider discussing their estate plans with family members to prevent misunderstandings and ensure that everyone is aware of their wishes. By taking a comprehensive approach to estate planning, women can protect their assets, provide for their loved ones and leave a lasting legacy that reflects their values and priorities.

The bottom line

Women go through many stages as they move throughout life, and many of these correlate directly with finances. A recent study project that by 2030, women may control as much as $30 trillion in assets.⁵ In other words? Women are – and are projected to be even more so moving forward – responsible for a lot of money. The more that women have become involved with personal and family finances throughout modern history, the more important it is for women to approach their financial situations and plans with a prepared mindset from as early in their lifetime as possible.

We hope this guide helps you take the first or next steps toward building the financial future you deserve. For outstanding questions or interest, a J.P. Morgan advisor will be happy to help.