While this delivers exceptional results for clients and employers alike it can mean that other responsibilities, such as managing your personal finances, can sometimes be pushed down the priority list.
Having a robust financial plan in place can help you to build up financial resilience, maximise your income and set you on a path for a comfortable retirement. So, to help get you focused on making your money work as hard as you here are four things that women in law should bear in mind:
- Invest for the long term
Juggling a professional career and a personal life means that sometimes women feel they have less time to plan for their financial futures. Establishing an investment habit can be a great way to boost your savings pot and help you plan for the future.
Every type of saving carries some risk, but some choices are riskier than others. Generally, the higher the risk you take, the higher the potential return, and vice versa. So, if you put your money in stocks and shares, you may ultimately get a good return on your investment, but you are at the mercy of the market. As you know the value of your investments may go down as well as up so that can be a bumpy ride.
Research by the independent Pensions Policy Institute in 2017 found that 34% of women are likely to have a career break involving caring responsibilities.
Research shows that two-thirds of women are not considering moving their money out of cash[1]. Don’t leave your lifetime savings languishing in a cash account when they could be invested to earn better long-term returns. Female finances often fall behind over time, and because of this there is a tendency for women to keep savings in cash.
So, if you’re not exploring putting your money into savings or investments where the interest rate outstrips inflation, your fund could potentially reduce in real terms. As you build up your savings and investments portfolio, you should look to keep your money in a range of assets so that if one type performs badly, another may perform well during the same period. Also remember to review your portfolio on a regular basis, so you can identify any underperforming funds.
- Plan for a career break or part-time
Research by the independent Pensions Policy Institute in 2017 found that 34% of women are likely to have a career break involving caring responsibilities. So, it’s vital for women to take control of their financial planning to prevent lower pension accruals. Again, this can be managed if a career break is carefully factored into your long-term savings plan.
Many women who take time out for career breaks or maternity leave want to return to a position offering flexible or part-time working. Within highly-skilled positions in industries such as the law, such opportunities still appear to be few and far between.
A report by McKinsey & Co found that most law firms offer flexible work programmes, many women still fear that participating in these programmes will damage their careers.[2]
Start the conversations regarding part-time hours early with your firm and, again, review your financial plan accordingly.
One of the best things you can do for your financial health is to believe in the work that you do, and learn to negotiate a fair salary.
- Plan for retirement
Pension and retirement planning throughout your career is key; failing to review your pension contributions in the early stages of your career can have a negative impact later in life.
Women today continue to retire with lower retirement income relative to their male counterparts[3] and can face a significant pension shortfall which, when taken together with shifts in family structure, well-being, home ownership and social care systems, leaves many exposed.
- Know your worth and ask for it
One of the best things you can do for your financial health is to believe in the work that you do, and learn to negotiate a fair salary.
According to a recent report by the Law Society, female lawyers, unlike men, are often challenged by their clients and employers about the level of fees they charge. The report found that it appears more acceptable for men to request greater financial recognition for their work, but women are perceived as aggressive when they do so[4].
Women can worry that making a fuss over pay could mean that they might later be sidelined for prime clients, overlooked for promotion or even dismissed as a result. This is rarely the case, and women should not avoid having these crucial conversations around pay, rather embrace them.
By Sarah Deacon, Area Manager at Wesleyan, a specialist financial services mutual for lawyers.
[1] https://30percentclub.org/assets/uploads/UK/Third_Party_Reports/Kantar_Winning_over_Women_white_paper_Final.pdf (page 6)
[2]https://www.mckinsey.com/~/media/mckinsey/featured%20insights/gender%20equality/women%20in%20law%20firms/women-in-law-firms-final-103017.ashx ([page 9)
[3] https://www.insuringwomensfutures.co.uk/uploads/2018/10/Womens-pensions-life-journey-23-10-c6.pdf (page7)
[4] https://www.lawsociety.org.uk/support-services/research-trends/international-women-in-law-report/ (page6)
