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By Julia K. Pham, CFP®, AIF®, CDFA®, Wealth Advisor featured in Kiplinger 

Women still face unique economic and social challenges today, so here are some key things to consider that can lead to a more secure financial future.

Every March, we celebrate Women’s History Month, reflecting on the transformational accomplishments of women over the years. Women are gaining more representation in leadership roles, outpacing our male counterparts in earned degrees(opens in new tab) and starting businesses at twice the rate of men(opens in new tab).

We have come a long way, but continue to face huge challenges. The gender pay gap, rising costs of child and elder care and weak support in terms of family leave policies are just to name a few.

Recognizing these areas that need improvement — while at the same time focusing on ways we can better our own individual situations — is how we can pave the way for generations after us.

In recognition of Women’s History Month, I’m offering some financial tips for women to think about as we face unique economic and social challenges throughout our lives. Hopefully, these considerations will help you be a little more prepared for the future.

1. Prepare for Potential Time Out of the Work Environment.

Whether it’s taking time off to finish school, to bear and care for children or take care of a sick parent, many women often find themselves following a different path than their male counterparts. The pandemic brought that divergence front and center, with women between the ages of 25 and 44 almost three times as likely as men(opens in new tab) of the same age group to be out of the workforce due to childcare demands.

These career breaks can have a huge long-term impact on finances. It’s estimated that a one-year break for a 35-year-old woman earning $100,000 per year would cost her $212,936(opens in new tab) in retirement contributions and salary by the time she reaches age 67.

Sometimes these career breaks can’t be timed, but if you do see one in your future, start planning for it now. Start saving aggressively to help cover basic living expenditures during that period. You don’t want to be tapping into retirement savings or maxing out credit cards to get by.

If there is room in your budget, consider saving some of your current income in an investment account to take advantage of the power of compounding while you are not working. It’s also good to build up your professional network: You can turn to them once you are ready to jump back into a job search after your break.

2. Change Your Mindset From a Savings to an Investing Outlook.

Research has shown that women are more likely to save than invest their money. The big distinction between the two is that the latter has the ability to compound and grow your wealth over the long term. If women invested at the same rate as men, there would be an extra $3.2 trillion of assets(opens in new tab) in their pockets today. The investing gap coupled with pay disparities has come with a severe cost: Women retire with only two-thirds(opens in new tab) as much money as men in their 401(k)s, even though women live, on average, six years longer(opens in new tab) than men.

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