Consumer Information

Women Need Financial Planning

Women have special needs when it comes to financial planning. On average, they earn less than men. They are more likely to take time out of the workforce to raise children or take care of elderly relatives. But they live longer, making the need to save more important. Fortunately, your financial planner recognizes those differences. Every woman needs to have a financial plan.

Women's earnings compared with men

All Workers
Year Women Men Earnings ratio
  1998 constant $ %
1989 19,965 33,826 59.0
1990 19,969 33,413 58.8
1991 19,971 32,486 61.5
1992 20,654 32,363 63.8
1993 20,413 31,761 64.3
1994 20,623 33,168 62.2
1995 21,080 32,421 65.0
1996 20,879 32,336 64.6
1997 21,013 33,120 63.4
1998 21,999 34,171 64.4
1999 25,800 41,200 62.6
2000 26,300 42,500 61.7
2001 26,400 42,400 62.1
2002 26,700 42,500 62.8
2003 26,400 41,900 62.9
2004 26,700 42,100 63.4
2005 27,300 42,700 64.0
2006 27,700 42,900 64.7
Note: Data before 1996 are drawn from Survey of Consumer Finances (SCF) and data since 1996 are taken from the Survey of Labour and Income Dynamics (SLID). The surveys use different definitions, and as a result the number of people working full-year full-time in the SLID is smaller than in the SCF.
Source: Statistics Canada, CANSIM, table (for fee) 202-0102.
Last modified: 2008-08-25.


You need life insurance

With 43% of the workforce comprised of women, it is clear that families need the incomes of two people, often just to live comfortably. Women's contributions to their family are valuable even when they don't work outside the home (See Insure Stay at Home Parent). Many women are working mothers, with dependent children. If your family relies on your income to make ends meet, it is critical that you be properly insured.

A financial advisor who is a member of The Financial Advisors Association of Canada can help you choose an appropriate level of insurance. While many couples approach financial planning as partners, it can be valuable for women to draft an individual plan to look at their own financial wellbeing.

Protect your family

Often the task of caring for young children or for older relatives falls to the women of the family. An Advocis advisor can help you plan for your dependents. If you are spending time out of the workforce, the advisor can help you budget for reduced family income. If your main concern is educating the children, you should know about RESPs and other methods of saving for a child (See How to Save for A Child).

The cost of elder care is increasingly falling to families. A financial advisor can tell you how insurance can be used to cover long-term care if you plan in advance. Or you may be able to save in an investment account that will be dedicated to caring for an elderly parent.

Know your own financial picture

Many women end up alone or sole parenting, either because of marriage breakup or the death of a spouse. Don't wait until you are dealing with emotional upheaval to take stock of your financial situation. If your husband dies, his assets can be frozen until his will is settled. If he leaves, what is to stop him clearing out the joint account? Women need to know the details of their family finances and take control of their own money.

Some essentials:

  • Make sure you and your husband have a will and you know what is in it.
  • Know whether your spouse is insured and with what company.
  • Know where important papers, such as the will and investment certificates are kept. Keep a list of all the institutions where you and your husband have accounts.
  • Have your own bank account.
  • Establish your own credit rating.
  • Keep a list of any assets you yourself brought into a marriage, such as furniture, an inheritance or a large amount of savings.
  • Establish your own retirement savings plan. If you do not work outside the home, insist that your husband contribute to a spousal plan. This is good tax planning for both of you.

Retirement planning

On average, women live approximately nine years longer than men. Whether those are good years will depend on your health and your ability to save for your retirement. If you are working, you ought to be saving for retirement, even if it is only a few dollars a month. The most effective way to save for retirement is in an RRSP. See RRSPs: Your Key Investment.

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