Is Lack of Confidence Affecting Single Women’s Savings Habits?

New research examining the financial planning and investing habits of single women finds that many may need to take a more proactive approach to growing and protecting their finances.

Fidelity Investments’ “Single Women & Money Study” finds that while nearly all (97%) single women believe it is important to be engaged in managing their money, they appear to be underestimating their knowledge and experience, neglecting to plan for their financial future and saving too heavily in cash.

According to the findings, single women are less likely to consider themselves knowledgeable than other demographic groups when it comes to saving for retirement, creating a financial plan and investing, which may be holding some back from taking the necessary steps to secure their financial future. In addition, the study found that single women are the least likely demographic (at 28%) to have prepared a comprehensive financial plan to help set savings goals and pay down debt. Moreover, nearly half (47%) do not have an emergency fund to cover three to six months of expenses, despite concerns about unexpected financial issues.

Single women also appear to be missing out on the earnings potential of their savings. The study shows that 8 in 10 single women keep a portion of savings in cash, while more than a third (35%) report that 50% or more of their savings is liquid. And while many singles report wanting to keep savings on hand for emergencies, single women were twice as likely as their male counterparts to say they keep their savings in cash because they do not know where to invest it.

Moreover, the study found that approximately one in five single women are reluctant to invest out of fear of putting their savings at risk. Fear was also found to be a motivator for investing, as 38% of single women cite fear of not having enough money in the future as a top motivator to invest, compared to only 25% of single men.

Meanwhile, widowed women are more likely than any other group to say they feel confident about their finances and in control of their money. The report notes that more than half of widowed women say their spending and saving habits are excellent and they have a budget to keep them on track. This positive financial outlook may be connected to early planning, the report further notes. Nearly two-thirds of widows say they had a financial plan in place prior to losing their spouses, and 8 in 10 of those women worked with their spouses to build that plan.

The study highlights a number of best practices for all women to keep in mind to be better prepared to reach their financial goals, including:

  • know what you own, what you owe and what your goals are for your money to ensure that your investments are working toward the future you envision;
  • put financial safeguards into place, including a plan that accounts for your individual situation and goals; and
  • make sure that you choose investments suited to your tolerance for risk and your savings timeline.

The online survey was conducted May 16-23, 2017, among a demographically representative U.S. sample of 2,260 adults comprising 1,503 single women (including those never married, divorced and widowed), 250 single men, 251 married women and 256 married men 18 years and older.

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