A year ago this week, a campaign called Save10 asked women to save 10% for life and retirement. Save10 was co-founded by Stephanie Matthews and me, under the umbrella of the Women's Foundation of Arkansas. The mission was simple: Ask as many women to save as we could. Last week we discussed how effective a simple personal ask to save from a friend or family member can be. Today, let's talk urgency.
The state of retirement for women is daunting. We are saving half as much as men, but we arguably should be saving more. Women live longer, make less money, and as caregivers, take more time out of the workforce. In 2019, while women made up half of the workforce, they still shouldered the vast majority of child care and household duties.
The dumpster fire of 2020 has done women no favors. The Labor Department on Friday reported that in September, over 850,000 women left the workforce, compared to a little over 200,000 men. The reason? Mostly caregiving, but also a bludgeoning of the hospitality and retail industries that has been dominated by women employees. As a result, 2020 will go down in history as not just a recession, but what many are now calling a "she-cession."
I just spent the last 2 weeks co-parenting virtual learning when a covid-19 scare coincidentally closed our beloved Gibbs Elementary. Like everyone else, we had to keep straight the Zoom meetings, their individual logins, and the indecipherable maze of Schoology. I remember looking at my husband at one point and questioning the value of my college degree. And we were two parents, at home, and able to work via Zoom. It's usually one parent -- the working mom.
[Video not showing up above? Click here to view » https://www.youtube.com/watch?v=Z-ShZRElK1o]
While I shudder to think of the backward step women are taking in the workforce at this time, I will hope and pray and ask our leaders to figure it out. But I won't hold my breath; none of us should, either.
For women who are still able to work full time, not furloughed, not laid off, earning a living wage, we must save as though our lives depend on it. We have to get our retirement savings rate to a point that will allow us to one day stop working. Anyone paying attention understands that the national debt we have added with the 2020 bailout means that we will likely be on the hook for ourselves in retirement. Will Social Security be there? Maybe, but in what form? Getting to the right savings rate now means we don't have to make larger sacrifices in an uncertain future.
Women need to build an emergency fund. Know in your heart that this is not a fund for home repairs, appliances, the next car repair or a new roof. Those are not emergencies. They are foreseeable expenses that must be saved for.
This year taught us what emergencies are. We have seen loved ones lose jobs, get critically ill, and sometimes leave us entirely. Those are devastating and unforeseeable emergencies. We should shoot for an emergency fund of 3-6 months of income.
And we should pay off debt. Aggressively. Our consumer debt makes us fragile and dependent. I challenge you to feel the power that comes from no debt.
Finally, what if you lost your job or stepped out of the workforce as a caregiver? If you have a working spouse, you have every right -- no, every responsibility -- to ensure that your spouse is saving enough to cover both of you in retirement, secure the emergency fund and retire debt as quickly as math will allow.
Retirement, emergency funds and a debt-free status are not events. They are processes -- processes that you start today and nurture lovingly over months and years because your future self is that important. And they are not easy steps. Few among us are where we need to be. First steps are rarely easy, but without them, we don't go anywhere. So be brave. Be compassionate. Take the first steps, and if you are already on the road, then keep going.
I urge every woman reading this, working or not working, to take the Save10 challenge at www.save10challenge.com, and to join a community of women talking about saving and paying down debt in the private Save10 Facebook group. One woman in the group this week shared that in 2020 she had finally paid off a large debt and built an emergency fund. There are 27 comments and counting of encouragement and women inspired to take it on themselves. I want this to be you.
Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book "But First, Save 10: The One Simple Money Move That Will Change Your Life," published by Et Alia Press. Contact her at sc@aptusfinancial.com.