Women are earning more, marrying later, and starting to take charge of their financial futures.
They make up 48 percent of stock-market investors. In families where both spouses work, nearly 1 in 4 wives earns more money than her husband does. Women-only investment clubs outperform their brother clubs.
So why is it that women still feel out of their element when it comes to making financial decisions? Studies and anecdotal evidence both show that women are more likely to say they need financial advice, but are less likely to seek it out.
Now, after years of ignoring women, some financial-services companies have started courting them with targeted marketing and special services. Women value relationships, education, and respect, these companies have found quite different from the typical firm's orientation toward transactions.
While this reaching out by Wall Street may be one piece of the puzzle, many experts emphasize that an effort on the part of women themselves to inform themselves about money matters and put action plans into practice is also desperately needed.
"All of the issues that apply to men apply to women more forcefully because of their lower earnings, greater longevity, time spent out of the workforce, and because they're likely to be earning their money in sectors without a retirement plan," says Claire Hushbeck, an economist with the retirement group AARP in Washington.
Building a nest egg for retirement is clearly one of the challenges. If women are earning money at all, they are more likely than men to work for a small company that doesn't offer retirement benefits. And since they earn, on average, lower wages, even if they do put aside a percentage to invest, it doesn't match what a higher wage-earner could put away. They may also qualify for fewer Social Security benefits.
"It's a reverse snowball effect: as women roll toward retirement, their options get slimmer," Ms. Hushbeck says.
Women's priorities also differ. They tend to want to provide for everyone else before they provide for themselves, says Deborah Owens, author of "Every Woman's Money: Confident Investing."
When Ms. Owens asks women during financial seminars which they should put first, invest for retirement or for their children's college education, they almost always vote for the latter.
"I say, 'No! It's retirement! Kids have other options they have their whole lives,' " Owens says. "Women make up 85 percent of the elderly poor, and it's because of the choices we make early on. It's OK to be selfish."
But it's not OK to be uninformed, planners say. Women, including well-educated ones with high-powered jobs, often avoid diving into money management, even when no one else is around to handle the decisionmaking. Patricia Ireland, a financial consultant at Salomon Smith Barney who leads financial-planning seminars for a New York alumnae group called Columbia College Women, says, "I'm constantly surprised by myself before I got into this business, and by my peers who are graduates of an Ivy League institution, who are women who are educated and have an influence but have no clue how to begin securing a future for themselves financially."
Jenifer Herrmann, a young advertising executive in New York, says she never paid too much attention to how her money was being invested until her father passed away four years ago. She describes the relationship she then had with her financial adviser as, "I won't call them, they'll call me."
"It was intimidating," Ms. Herrmann says. "I wouldn't talk about it because I didn't know what I was talking about."
Eventually she decided she felt more comfortable with a woman adviser, who helped map out her goals and a financial plan.
Women who grew up in households where their fathers made the money and the money decisions often feel comfortable leaving their own families' finances in their husbands' hands.
Barbara Reeb, a retired psychologist in San Diego, says her father controlled the money while she was growing up, and her husband made all financial decisions throughout her 35-year marriage. After her divorce, she felt ill-equipped to handle the financial management. "I knew I was going to have to do it, and I wanted to do it, but I didn't know how to go about it," Ms. Reeb says.
When she first approached financial advisers after her divorce, the men she talked to left her feeling uncomfortable. One told her, "I'll take care of your money, dear, just like I would my mother's."
She eventually found a woman financial planner who specializes in women clients.
Indeed, finding an adviser that one trusts can be tough for anyone, but especially challenging for women. Surveys show that women haven't been served well by traditional financial services institutions.
"We see an inherent bias," says Lisa Caputo, president of Women & Company, a new membership organization affiliated with Citigroup that aims to guide women in their financial lives. She cites firms that insist on sending their statements in the name of the male head of the household, even though his wife and daughter also have accounts.
Now some financial planners, especially women, have made sensitivity to women's issues a priority. Some have centered their practices on female clients a loyal and lucrative niche. Major financial institutions have followed suit by targeting the women's market with specialized products and services.
Women's Financial Network, an offshoot of discount brokerage Muriel Siebert & Co., was founded a year and a half ago when Ms. Siebert realized she didn't have many female customers. WFN offers the same services at the same rates as the parent company, but with extra features such as a free weekly newsletter, web-based education, and toll-free telephone access to financial guides.
Citigroup launched Women & Company last year with the aim of educating and advising women and with an eye to winning loyalty for Citigroup services in general.
The organization charges a $125 annual fee for unlimited telephone access to financial planners trained especially for women, web-based financial-planning software and educational materials, regional events, and discounts on services such as child care, insurance, and nanny payroll preparation.
"Looking at national data, 80 percent of consumption decisions are made by women in the family, yet women say what they are most concerned about is lack of knowledge of finance and financial management," says Mahnaz Mahdavi, an economics professor at Smith College and director of the school's new Women's Financial Independence program. "We want to emphasize the importance of financial literacy for all, but especially for women."
The Smith program aims to teach students practical money-management skills before they graduate into the real world. And, so far, students have been overwhelmingly enthusiastic about the initiative.
"As I graduate I will use what I learned in personal finance to pay off my student loans," says Yakhara Sembene, a Smith sophomore. "At least you don't feel like you're working in the dark. You've got a path."
Although taking charge of finances is important for both sexes, women often face greater challenges than men. On average, women:
Live seven years longer than men.
Earn 76 cents for each dollar men earn.
Spend 11 years out of the workforce to care for children or elderly parents.
Qualify for lower Social Security benefits than men do, and have lower retirement-account balances.
Are more likely to work for a company that does not offer retirement-savings benefits.
Have higher healthcare expenses.
Often have more difficulty establishing credit than men do.
Bookstores and the Internet are full of advice on personal finance. The following resources may be especially helpful for women. Also keep an eye out for women's groups or investment firms that offer seminars. Smart Women Finish Rich: 7 Steps to Achieving Financial Security and Funding Your Dreams By David Bach Broadway Books, $13.95 paper)
Prince Charming Isn't Coming: How Women Get Smart About Moneys By Barbara Stanny (Penguin, $12.95 paper)
Women & Company, a membership organization that aims to educate and advise women on financial planning, www.womenandco.com, 888-679-9255 ($125 annual membership fee).
Women's Financial Network, a discount brokerage and educational website, www.wfn.com.