Women are 84% more effective in leadership than men, yet only 5.8% of women are CEOs of Fortune 500 companies. Financial independence is essential for women to take control of their financial future and create a more equitable job market.
It is thus critical to understand the key elements of financial empowerment and what it means to Canadian women.
Women’s Financial Empowerment: A Look at What’s Possible
Women have made significant advancements in financial equality and empowerment, but work is still to be done. Women often have control over their family’s financial decisions and have been shown to have superior investment portfolios compared to men.
Financial literacy and money management skills can bring a greater sense of security and make it easier to save and invest in the future. Awareness of the challenges women face to achieve financial empowerment is essential.
Obstacles to Women’s Economic Empowerment
Financial freedom is a form of empowering women, but they face many obstacles to achieving economic equality.
Women often earn 20% less than men, and this gap is even more significant for women of colour. They also face issues such as salary discrimination, lack of understanding of financial tools, and juggling home responsibilities.
Rights groups are pushing for greater gender equality, but social structures perpetuating gender bias are hard to dismantle and replace.
The Daily Challenges Faced by Women in the Workforce
The disparity in pay between men and women continues to exist. Women typically make less than men, particularly non-white females.
Having children can significantly affect a woman’s career trajectory. It can lead to a wage penalty of approximately 4% per child for women overall and 10% for women of colour.
Women and girls are less financially literate than men, leading to fewer women pursuing a career in finance. The gender gap in economics is particularly stark, with twice as many men as women studying the subject.
Working Towards Financial Empowerment
Despite the potential difficulties, you may be surprised to find out how much you already know about finance. Specific financial strategies apply to different life stages, while other plans can be beneficial anytime.
Only a small number of women think their parents adequately prepared them for financial management. Therefore, it is important to set financial goals and create a financial plan by understanding short, medium, and long-term money management techniques.
Review Your Spending
Creating a budget will enable you to stay within your financial limits and work towards your ambitions.
Women have already demonstrated superior money management skills compared to men, but these abilities can be further improved with basic budgeting knowledge.
When creating a budget, it is important to examine monthly earnings and itemize spending into categories. In addition, necessary expenditures should be separated from frivolous purchases to help identify priorities and eliminate excesses.
Pay Down Your Debt
It is vital to keep debt from getting out of hand. It can damage your finances, cause stress, and impede you from achieving financial goals.
You must factor in debt in your budget. You should always pay more than the minimum payment on your credit cards or even pay off the balance every month if possible. This simple step will help you build and maintain a good credit score.
Save a Nest Egg
Save, create an emergency fund, and build credit. Financial advisors recommend having enough funds to cover three to six months of expenses. This will help in times of need, such as health issues, job loss, or family emergencies.
An emergency fund prepares you and your family for the unexpected.
Plan for Retirement Now
Women have a longer life expectancy than men, yet they often save less than men.
To ensure a comfortable retirement, it is advisable to contribute to work-sponsored retirement accounts. You should also open a traditional or Tax-Free Savings Account (TFSA). The maximum amount that can be deposited in a TFSA for 2023 is $6,500.
Invest Wisely and Become Financially Empowered
Investments can be a great way to save money, beat inflation, and sometimes even provide a steady income. Unfortunately, women are generally familiar with this concept but are unaware of the full benefits they can reap. This can cause women to feel uncertain about their investing abilities.
Women have historically been more effective than men in investing, with more successful portfolios. Despite this, only 21% of adult females in Canada currently invest in the stock market. Find an investment strategy that works with your risk level and goals.
Develop a Strategy
Choosing between being an active or a passive investor can be helpful. Active investors purchase and trade assets regularly, while passive investors acquire assets and wait for them to appreciate.
Investments made over a short period can potentially experience growth within three years. However, investments made within a longer time frame may take more time to generate a return.
Investing for the long term can involve bonds, stocks, real estate, and other assets. Therefore, deciding on a high- or low-risk portfolio is also essential.
Partner for Investing Success
Managing money is a crucial life skill, and expert support can help boost confidence in this area. Whether you are just starting to build up a portfolio or already have a substantial amount of assets, it could be beneficial to work with an advisor.
A financial advisor acts as a personal guide for your money, offering advice and support to help improve your financial future. They can help you to see the bigger picture and build a portfolio that aligns with your goals.
Finding a financial advisor who makes you feel secure and supports women is imperative. Therefore, seek out one who is in regular contact with you.
Ensure You Are Heard
Finding direction in life is an individual journey, and one should feel free to ask any questions they have without fear of judgment.
For example, when you ask a financial expert, it’s not uncommon to be met with a condescending attitude. This is usually evident before you have even finished asking your question.
When dealing with a negative experience can be discouraging. Therefore, it is best to speak with the person’s manager. If necessary, seek out another financial services company that will give you the respect you deserve.
What You Do Matters
It is crucial to recognize your contributions to your household beyond just financially. In relationships, your financial contribution is as significant as your partner’s. Therefore, to protect your family, it is essential to insure against any potential losses of your contribution.
When selecting a financial advisor, choose someone who understands and respects your roles, such as mother, wife, and professional.
Be Patient With Yourself
Financial empowerment takes time and is not a competition; it is essential to make sound financial choices.
It can be difficult for women to reconcile the demands of their family life and professional work. In these cases, the lack of financial planning may not be due to intentional procrastination but rather an overwhelming feeling of being spread too thin.
When selecting a job, consider its flexibility to fit your lifestyle and family needs. Also, consider the educational opportunities it provides to help you achieve your career objectives.
The Right Perspective for Financial Freedom for Women
Life should be about finding balance, not striving for perfection. Balance does not mean denying yourself pleasure, nor does it mean always putting off enjoyment. Instead, it is about finding a balance between what you consume now and what you will consume in the future.
Planning for the future is important, but relaxing and enjoying the present is also crucial. Indulging in activities like spa days or reading can help to create a balance and make you feel content.
Eye on Your Career
Women make up most of the workforce, tend to have higher educational levels, and work full-time more often than men. Therefore, women must speak up and advocate for themselves and their careers.
Women have made significant progress in their participation in the workforce, yet they still face obstacles. Therefore, it is necessary to take the initiative to promote your job prospects and ensure your salary is fair.
Gut Check Yourself
Women often feel insecure due to doubts about their abilities and pressure to perform at their best, leading to imposter syndrome consistently.
Women also tend to underestimate their capabilities and experience, leading to them not earning what they deserve. To combat this, one must stay confident in one’s career skills.
Don’t Go It Alone
Having a supportive network of female friends can help women become more successful in achieving their goals.
A solid professional network can lead to better job opportunities and higher pay, aiding financial independence.
A Win is a Win – Enjoy it!
Reflecting on your accomplishments and achievements is essential and should be kept track of in a journal. Taking the time to reflect on these successes can help boost confidence and support achieving long-term goals.
Goals for You as a Whole
Setting and meeting personal goals is essential for building confidence in achieving professional aspirations.
Prioritize your well-being, even if it does not lead to immediate tangible benefits such as increased income or career advancement. Being well will lead to positive outcomes over time.
Be Honest About Your Struggles
Sharing your struggles with others can be beneficial, as it can provide support and lead to the formation of solid friendships.
Being vulnerable is not a weakness; it is one of the most sought traits in leadership roles.
Credit Where It’s Due
Taking credit for your ideas and accomplishments at work is important, especially when working in a large team. However, this cannot be easy due to feelings of showing off or seeking unnecessary attention.
To ensure that your hard work is recognized, you must challenge any existing beliefs that may hold you back. Additionally, demonstrating persistence and announcing your successes can help combat gender and wage inequality.
Take the Lead
To claim credit for your achievements, demonstrate your expertise by confidently presenting yourself as an authority on a particular topic to your colleagues.
Despite a lack of formal knowledge, we may better understand a particular topic than we think. As a result, we can often add something new and unexpected to conversations with colleagues.
Taking ownership of projects shows commitment and passion and ensures that success can be attributed to the responsible individual. It is an important step in professional development.
Discussing one’s achievements and projects with peers is essential, as this allows for recognizing individual contributions and prevents work from going unnoticed. In addition, confidence is vital when sharing these accomplishments.
Build Your Bank
Women now make higher salaries than in the past, but they still earn less than men for the same job. To ensure you are adequately compensated, you should communicate your value and negotiate your salary. Additionally, you should request periodic raises, as you are twice as likely to get one when you ask for it.
What You Know and Feel
Researching salary is a crucial step when considering a new job. It can help to ensure that you are offered a competitive wage for the position. Job Bank can be used to determine what salary range is typically offered for a given job title and level of experience. This information provides a basis for salary negotiations.
Women often attempt to be perfect, but this is unrealistic. Furthermore, the pursuit of perfection can cause stress and anxiety.
Believe in yourself and know that you deserve the same pay as other professionals in your field.
Put Your Foot Down
Women are typically less likely to negotiate their salary when offered a job. This lack of negotiation can result in significant long-term financial losses of up to $1 million over a lifetime.
Remain aware of your worth and stay positive during negotiations. However, it would be best if you did not settle for anything less than what you deserve.
Getting the desired salary is not always possible when negotiating a job offer. An alternative is to ask for a three-to-six-month plan for pay raises. The potential employer has to meet the salary requests if specific goals and accomplishments are completed within this time.
Women often take on a significant amount of responsibility in the home. When entering the workforce, they must manage home and career responsibilities, making work-life balance essential.
Maintaining a proper balance is essential to avoid burnout, which can negatively impact personal and professional outcomes.
Remember that balance looks different for everyone, especially working women.
Be You (And Don't Apologize for It)
Finding work-life balance is different for everyone, so it’s important to recognize your thoughts and feelings. Removing the pressure to be perfect is critical. You must accept that you are human and some days will be less productive than others.
Self-care should be a priority, and boundaries should be established to prioritize mental and personal health.
Working longer hours should be balanced with taking care of one’s well-being to achieve optimal performance at home and work.
Manage the Moving Parts
Creating a flexible yet structured schedule is essential for success, as it allows time dedicated to necessary tasks. Prioritizing and delegating tasks helps you achieve this goal.
Invest your energy wisely, avoiding people and situations that are not beneficial to your well-being. Burnout can occur, so taking time off and doing something enjoyable to give yourself a break is essential.
Like-Minded Women Who Feel the Same
Multiple resources are available to help women become financially independent, including guides, tools, mobile apps, and courses.
Examples of these resources include TwentyFree, which teaches millennials how to save, pay off debt, and invest. Money and Mimosas focus on financial wellness for self-employed women.
Nav.it, Hapi, and Savvy Ladies are three apps which offer helpful financial advice. This advice ranges from learning about finances to investing in the future and free resources to manage money.
Learn More to Do More
This post is not meant to be conclusive in every way to become financially empowered as a woman. However, financial empowerment comes from empowered thinking. If you set the goal to be empowered and independent, more than just your bank account will improve over time.
Remember that you are not alone in this journey. Empowerment, independence, gender equality, and women's well-being and growth are issues experienced globally, especially in developing countries. Many women throughout Canada and the world face the same issues you face.
So subscribe to our blog and check back often for more posts about how we, as women, can become personal finance thought leaders together.
Financial literacy and money management skills can help individuals achieve greater financial stability and enable them to save and invest for the future.