Women have long faced an uphill battle when it comes to financial well-being. From the persistent gender pay gap to the ‘glass ceiling’ that limits career growth, and the dual burdens of personal and professional responsibilities that often fall squarely on women’s shoulders, the challenges have been daunting. For centuries, society has minimized women’s roles in critical financial decisions, and in some cases, even questioned their capability to lead in these areas.
But the tide is turning.
We’re witnessing a significant shift toward greater financial freedom and empowerment for women. Every day, we see progress in dismantling gender biases and breaking down the barriers that have kept women from fully participating in the financial landscape. As women increasingly step into roles as financial stakeholders and decision-makers, it’s clear that their choices are distinct from their male counterparts — and these differences are making waves.
Now, let’s dive into how women’s financial choices are shaping society, influencing spending trends, and transforming the landscape of values-aligned investing and philanthropy.
If Money Were Easy
Data Surrounding Women’s Behavior with Money
Women’s financial confidence and competency are on the rise. A Bank of America Study discovered that 94% of women believe they will take full responsibility for their finances at some point in their lives. This growing awareness has sparked a desire to deepen their knowledge in personal finance, budgeting, and investing.
In the same study, researchers found that women are starting to feel more comfortable talking about money, with 53% acknowledging that they find it easier to do so with other women.
As women take on greater responsibility for household financial decisions, their priorities are shifting away from the traditional focus on wealth accumulation. Instead, women are channeling their financial power toward their communities. A staggering 73% of donors worldwide are women, and according to The 2018 U.S. Trust® Study of High Net Worth Philanthropy, 93% of high-net-worth women choose to give to charities.
The data doesn’t lie: women are not only gaining confidence in their financial decision-making but are also directing their wealth toward making a meaningful impact through charitable giving.
The Psychology Behind Women’s Financial Choices
For much of history, women have been excluded from controlling their finances and making important investment decisions. These long-standing social constructs have left a lasting impact. It wasn’t until 1974 that women gained the right to obtain a credit card separately from their husbands. At the same time, higher divorce rates and lower remarriage rates have increased the number of women who enter retirement unmarried, placing them in the position of needing to be fully responsible for their own finances without the benefit of historical empowerment.
Given this financial journey, it’s not surprising that women make different decisions about money than men. Women prioritize their values, empathy, and social consciousness in their financial choices. For example, when faced with an investment opportunity, men might hold onto investments based solely on returns, while women are more likely to conduct thorough research and practice attentive due diligence.
On average, women tend to be more cautious with their financial decisions — perhaps a result of decades of financial repression. But caution isn’t necessarily a bad thing. As we continue to champion women’s financial empowerment, we’ll see their self-esteem and confidence in financial matters blossom.
What it Means to Align Your Money with Your Values
Women are increasingly interested in making a positive impact with their money by adopting a values-aligned investment strategy. This approach involves investing in companies that reflect your personal values and ethics, such as those that:
- Provide generous paid parental leave
- Treat and pay employees fairly and equally
- Have a clear charitable giving strategy
- Operate ethically across their business dealings
But values-aligned investing goes beyond just selecting companies to invest in; it also means directing your money toward causes and considerations that matter most to you. For example, the 2018 U.S. Trust® Study of High Net Worth Philanthropy found that women are leading the charge in philanthropic engagement. With 93% of high-net-worth women giving to charity, 56% volunteering, and 23% serving on nonprofit boards, women are clearly using their financial power to drive positive change. Additionally, a quarter of high-net-worth women donors support causes aimed at benefiting women and girls, driven by the belief that this is the most efficient way to address societal issues.
Women understand that building wealth is about more than just accumulating money — it’s about lifting others up and recognizing our collective strength. Aligning your financial choices with your values is essential for long-term financial success that is also deeply fulfilling.
How to Align Your Money with Your Values
The first step is to identify your money values. Since everyone is different, money values can vary greatly from person to person. Uncovering your personal money values will depend on what matters most to you in life:
- What gets you up in the morning? Consider the things that drive you in your daily life, such as health, family, religion, career, community, education, etc. There are no right or wrong answers.
- Who is most important to you? Think about the people and communities that matter most, whether it’s family, a spouse, community members, or even pets.
- If money weren’t an object, how would you choose to spend your time? Consider how you would use your resources to impact or change the world.
Reflect on your core values and priorities to understand the motivations behind your spending habits. Then, make a list of all the areas where money affects your life, such as career, retirement, charitable giving, and education.
Next, identify investment opportunities and charitable causes that align with your values. For example, if your dog is one of the most important things to you, research local dog shelters and adoption centers to donate to. If family and education are top priorities, consider opening a 529 plan to save for future education expenses.
The bottom line is that your values could ideally inform every financial and investment decision you make, so it’s essential to create a financial strategy that reflects them.
How to Create a Giving Plan and Give Smart
Women are driving change in society with their growing interest in prioritizing charitable giving in their financial strategies. To be successful in this, it’s essential to set clear philanthropic goals and intentions. Consider: What organization(s) do you want to give to, and why? How much do you want to give? How often do you want to give? Answering these questions will kick-start your charitable giving plan.
There are many tax-savvy charitable giving strategies that women can implement. These include:
- Using a Donor Advised Fund (DAF)
- Itemizing, if possible
- Donating stocks or bonds
- Bunching charitable contributions
- Donating appreciated non-cash assets
- Establishing a charitable trust
Work with a financial advisor to see which charitable-giving strategy is best for your financial situation and philanthropic goals.
Remember, giving doesn’t always involve money. Time is one of the most valuable gifts you can offer to charitable organizations. Many operate primarily on volunteer labor, so any funding they receive can be directed toward their mission and internal staffing.
5 Strategies for Women to Build Financial Confidence
Women are undoubtedly the future of wealth. By 2030, American women are expected to control most of the $30 trillion in financial assets that baby boomers will possess. Recognizing this, it’s essential to empower women to make informed financial choices sooner rather than later. Here are five strategies to help increase financial confidence:
- Prioritize education: Knowledge is power. The more informed you are about financial trends, the more confident you’ll be in your financial decisions. This doesn’t require going back to school for a financial degree; there are many ways to enhance your knowledge through podcasts, YouTube, blogs, and webinars.
- Seek support: Find trusted peers and professionals for advice. A financial professional can explain new laws and trends and help you set achievable financial goals.
- Utilize digital tools: There are more financial tools available than ever before, many of which are free. Explore investing apps and personalized budgeting tools to help you get started.
- Build savings: A sense of security can go a long way. Of course, it’s important to balance saving with investing and building a diversified portfolio, but it may be easier to start taking risks if you have a safety net of savings.
- Start small: Building financial confidence can have setbacks, so starting small and setting achievable goals will set you up for success.
The Future is Female
There’s a powerful movement happening right now around women’s financial confidence and empowerment, opening up exciting opportunities for growth and exploration. The financial world has traditionally been male-dominated, but times are changing, and the future is bright for women’s financial prowess and autonomy. With a greater focus on giving and philanthropic efforts, society as a whole will benefit from the continued rise of women’s spending power.
If you have questions about the future of the female dollar, or want to get started on your own empowered financial journey, get in touch with our team.
Sources:
Bank of America. “Women, Money, Confidence: A Lifelong Relationship.” Bank of America. April 2024.
Nonprofit Tech for Good. “2017 Global Trends in Giving Report.” Nonprofit Tech for Good. 2017.
