Dr. Nasreen Khatri is an award-winning registered clinical psychologist, gerontologist and neuroscientist with over 15 years of professional experience. She specializes in the assessment, treatment and research of mood and anxiety disorders in women and aging at The Rotman Research Institute in Toronto. She is also a Scientific Officer of the Centre for Aging and Brain Health Innovation at Baycrest Health Sciences. Dr. Khatri was commissioned by TD Wealth to write this Insights piece.

By Dr. Nasreen Khatri
Clinical psychologist, gerontologist & neuroscientist
Brain Health Innovation at Baycrest Health Sciences

When it comes to financial health, the sad reality is that single women are largely ignored by society.

Studies have shown that most women will be the sole financial decision makers in their household at some point due to personal preference, divorce, or the death of a spouse.

The fact is that most women will be financially single either by choice or circumstance for at least part of their lives—yet the financial health of the 'single' woman isn't something we hear much about from financial institutions or society at large.

All too often, when we talk about women and financial health, it's tied to events more commonly associated with women in relationships: moments like getting married, starting a family, or saving for a child's education. As a society, we don't foster conversations about women becoming independent financial agents for the long haul.

To be clear, I am not a financial expert. I am a clinical psychologist and neuroscientist with more than 15 years of experience in studying women's brain health, and I find the lack of conversation and awareness around single women and money management deeply troubling.

Why?

Because financial health is strongly linked to mental health. If you're worried or stressed about money, have no financial plan, or aren't sure if your financial needs will be met, your mental health will be negatively affected.

If we are to empower single women – unmarried, divorced, or widowed – regarding mental health, that includes facilitating their financial health and confidence.

The link between financial stress and mental health in single women

Research shows that there is a strong link between financial stress and mental health problems. Since women are already overrepresented in diagnoses of depression and anxiety compared to their male counterparts, the need for better financial services is key for female mental health.

Moreover, better financial education for women is key.

Women have been disproportionately affected economically by the COVID-19 pandemic because they are more likely to work in industries that have been hardest hit – including the service and hospitality industries – or because they have quit or stepped back from work to provide child or elder care.

I see these pressures magnified in mid-life women, when both financial and role demands peak for many people.

Beyond mid-life, financial stressors may be amplified for single women. Trying to save for a personal milestone such as retirement is difficult enough in a dual-income household and can be much harder for women who are single, divorced or widowed.

The unique financial stresses of widowed women

Research has shown that women may see money differently than men. Studies show that women are more likely to use money in an instrumental way (e.g., a child’s education, philanthropy, retirement) as opposed to accruing money for its own sake, compared to men.

Women are also still raised not to talk about money, or to view personal finance as a taboo topic.

These truths suggest why single women tend to have less contact with their wealth managers compared to single men according to a 2014 report by TD Wealth entitled 'Exploring Wealth Personality' (9.3 total contacts per year for women, 12.5 for single men).

This can be particularly troubling for widowed women. Many women who experience the loss of a spouse find themselves in the difficult situation of becoming financially independent for the first time in their lives, without the experience, confidence or money culture that allows them to ask questions, talk about money and become comfortable in their new financial role.

A massive transfer of wealth is also about to take place in which aging women will be the benefactors. In 2017, Canadian women controlled $1.3 trillion of personal wealth, and that number was projected to skyrocket to at least $3.3 trillion by 2026, according to a 2017 study by TD Wealth.

Canada is heading toward an aging, female economy, but one in which many women are unprepared to manage their finances with confidence.

What can financial institutions do to help?

Financial institutions can offer programs and train professional to provide tailored financial support, education and services to financially single women.

I believe TD is on the right path. In 2020, TD Wealth launched TD Wealth for Women with dedicated educational resources and financial information for women of all backgrounds, economic statuses and life stages. Women can also find a financial advisor on this site.

I have also learned that TD Wealth for Women launched a program that includes advisors who specialize in serving the specific needs of women. It has a mandate to increase the representation of women advisors across Canada.

These measures are a good start, but more needs to be done.

Talking more openly and frequently about the financial health of single women and helping prepare women for financial singledom is a key component of empowering women to achieve better financial health.

Women need a financial plan that begins early and evolves often as they develop different goals throughout their lives. Financial institutions have the opportunity to better serve, not just single women, but all women, by creating new strategies and services that demonstrate a clear understanding of how they use and approach money differently than men.

Even in a culture that is engaging in more and better conversations around mental health, compared to other forms of wellness, financial wellbeing is undervalued.

Going forward, awareness of the financial needs of single women combined with accessible, scalable services that provide the right combination of education, support and trusting relationships with advisors, will make for successful, independent financial agents that will benefit all Canadians.