I specialize in helping single women make sense of their money and their taxes.
So I was very interested when Fidelity* recently came out with a study exploring the financial planning and investing habits of single women – they surveyed 1,503 women who never married, are divorced or widowed as well as single men and married men and women.
Kathleen Murphy, president of personal investing at Fidelity said of the study “…..it’s critical that women be actively involved and invested in the financial choices that can enable them to live the lives they deserve.”
There are a lot of interesting things in this study. I could write a bunch of newsletters about it. In fact, maybe I will!
One statistic that jumped out at me was this: “Single women are twice as likely as their male counterparts to say they keep their savings in cash simply because they don’t know where to invest it.”
This resonated with my experience working with single women. Often my clients come to me with a big pile of cash in a checking or savings account. In some cases the balance exceeds the FDIC insurance limit of $250,000 per depositor, per FDIC-insured bank. This means if the bank goes under, they might not get all their money back. A small risk, but why take it?
Some of these women have been so busy with good paying jobs, their cash has just accumulated! Not a bad problem to have.
But often their cash is not the result of a positive event. Maybe it’s life insurance proceeds or other inheritance from the death of a beloved parent or spouse, or even an adult child. Maybe it’s what’s left after acrimonious divorce proceedings. It is important to acknowledge grief, anger and other emotions surrounding our money.
Certainly everyone needs some cash on hand for an emergency. I admit to
being a lifelong cash hoarder myself.
But keeping too much in cash long term leads to an erosion of purchasing power because of inflation.
The old saying “a dollar isn’t what it used to be” is certainly true.
An all-cash or cash-heavy portfolio means you are missing out on potential growth over the long term.
It’s time for single women to take the next step with their piles of cash!
*I am not affiliated with Fidelity.