Women who experience a significant life crisis such as a divorce, death of a spouse or job loss are more likely to struggle with finances than men dealing with a crisis. A life crisis also takes a bigger toll on women's emotional health, according to a survey by AARP Financial Inc.
"No one escapes the financial implications of a life crisis, but they are particularly acute for women," said Richard "Mac" Hisey, president of AARP Financial Inc. "The demographic considerations are obvious: women outlive men, so they experience more life crises and deal with the consequences longer. But women also tend to be the caregivers. That means women are frequently dealing with the human and logistical consequences of a life crisis, leaving little time and energy for the financial considerations."
Of those polled, 65% of women ages 40 to 79 had experienced a major life crisis that significantly impacted their finances. Of people who had experienced the death of a spouse, 46% of women vs. 17% of men said it had a significant impact on finances. Also, 66% of women who had experienced a long-term job loss in their household said it had a huge impact on their finances, compared with 49% of men.
When a divorce occurred, 74% of women reduced their expenses, compared with 59% of men; 56% of women sold their home, compared with 44% of men; and 42% of women took a second job, compared with 21% of men.
Women polled also expressed more concern about their financial futures. More women (61%) than men (52%) were worried about having enough money over the rest of their life.
It's not totally surprising that a large number of women would experience significant financial setbacks after major events such as a divorce or spouse's death. Women in the U.S. still earn only 78 cents for every dollar a man earns, and African-American and Hispanic women earn less than that. Many women also voluntarily leave the workforce to raise children, leaving them vulnerable to having little to no income if their marriage ends.
While no one can know when they may experience a significant life crisis, having some kind of financial plan in place can help soften the financial impact. Women who are married should talk with their spouse about their situation so they are fully aware of what could happen with their finances in the event of a major illness or death. Both spouses should be aware of any insurance coverage, savings, retirement accounts, debts, etc. Single women should also review their finances and put together plan that can help them get through tough times in the event of a job loss, disability or other significant event.