Women are 84% more effective in leadership compared to men. Still, only 5.8% of women are CEOs of Fortune 500 companies. Financial independence is supporting oneself without assistance and taking charge of your financial future. Historically, the job market has marginalized women. Therefore, it is more important than ever to understand financial empowerment and its key elements.
Women’s Financial Empowerment: A Look at What’s Possible
Women have made incredible progress in the fight for equality, finance, and women’s ultimate empowerment. Still, the struggle continues.
Many women control their family’s daily finances. When they invest, their portfolios even outperform those of their male counterparts.
Financial awareness and money management skills can give you a more profound sense of security. In addition, these skills make it easier to save and invest in the future.
It may help to understand the challenges women face to facilitate your progress toward financial empowerment.
Obstacles for Women’s Financial Independence
Financial freedom serves as a type of personal empowerment. Yet, several roadblocks make it hard for women to participate in finances equally.
For example, women typically earn 20% less than their male colleagues. This circumstance increases for women of colour. Today, women must face issues such as salary discrimination and limited understanding of financial tools, all in addition to managing responsibilities at home.
Some positive groups are advocating for equal rights for women. Nevertheless, persistent biased social structures remain hard to break.
The Daily Challenges Faced by Women
For instance, the wage gap between men and women persists. Women routinely earn less than their male peers, especially non-white females.
Furthermore, children can disrupt a woman’s career. On average, women experience a wage penalty of about 4% per child—women of colour face an approximate 10% penalty under the same circumstances.
Also, women have less exposure to financial literacy. As a result, they’re less likely to study courses that lead to a career in finance. In economics, for instance, the ratio of men to women is 2 to 1.
Gearing up for Financial Empowerment
Despite these challenges, it may surprise you to learn just how much you know about finance. Some financial strategies apply to various stages of life. However, other financial plans make sense at any time.
A relatively small percentage of women believe that their parents did an excellent job of preparing them to manage finances. It’s critical to set financial goals. You can build a lifelong safety net by understanding short-, medium- and long-term money management strategies.
Examining Your Spending
By keeping a budget, you can spend within your means. A budget will also help you save toward your financial goals.
Already, women have proved better at managing money than men. However, you can improve your money management abilities even more with basic budgeting skills.
It helps to examine your monthly earnings when beginning to create your budget. Next, you’ll itemize your spending into categories.
When creating your budget, be sure to separate frivolous purchases from necessary spending. This kind of assessment will help you establish your priorities.
Paying Down Debt
It’s critical not to let your debt spiral out of control. Debt can batter your finances.
Even worse, it can lead to stress, threatening your health. Moreover, debt can stop you from reaching your financial goals.
It’s a good idea to consider adding debt to your monthly budget. However, it’s essential always to pay more than the monthly minimum on your credit cards, no matter your strategy.
Also, make sure you pay your balance off every month. This tactic is a great way to build your credit score.
Building a Nest Egg
You must also start your savings. It’s also important to establish an emergency fund.
Furthermore, you must start to build your credit. Financial advisors suggest building an emergency fund that’s big enough to cover three to six months of your expenses.
This kind of nest egg can help you during the worst of times. For instance, you may have a health scare.
Alternatively, you may lose employment or have a family emergency. In either case, an emergency fund will prepare you for these kinds of unexpected events.
Planning for Retirement
Most women live about 6 to 8 years longer than men. However, they typically save less than men.
Unfortunately, women also often outlive their money. Therefore, you can have a more enjoyable retirement if you save for later years.
For instance, it’s a good idea to contribute to work-sponsored retirement accounts. In this case, your goal is to earn full company matching if it’s available.
You may also consider opening a traditional or Tax-Free Savings Account (TFSA). For 2022, you can put as much as $6,000 in your TFSA.
Investing Wisely Can Bring Financial Empowerment
Investments can serve as savings that grow continuously. They can also help you to beat inflation. In some cases, they can even serve as a reliable source of income.
Many women are acquainted with the concept of investing. However, they’re unaware of the full extent of the dividends they can earn. Moreover, they doubt their ability to invest successfully.
Historically, women have proven just as effective as men at investing. Furthermore, their portfolios have proven even more successful than men’s. Yet, only 26% of American female adults currently invest in the stock market.
You can find the right investment strategy based on your level of risk and your short-and long-term investing goals.
Developing a Strategy
First, it’s helpful to decide whether you prefer active or passive investing. An active investor buys and sells assets frequently. Meanwhile, a passive investor buys assets and waits for them to increase in value.
In general, a short-term investment might increase in value within three years. But, conversely, a long-term investment may take much longer to increase in value.
Long-term investments might include bonds, stocks, real estate, and other assets. You must also consider whether you want a high-or low-risk portfolio.
Partnering for Investing Success
Investing and managing your money is one of the most important things you’ll do in life. Expert support can serve as a great confidence booster in this regard.
You may have just started to build your portfolio. Alternatively, you may have growing assets. It may serve you well to work with an advisor in either case.
A financial advisor is like a personal trainer for your money matters. They’ll give you finance tips. They can also guide you and offer help when you feel overwhelmed or ready to give up on shoring up your financial future.
An advisor will help you see the big picture. Also, they’ll help you to build a portfolio that matches your goals.
It’s essential to work with a financial advisor that gives you peace of mind. With this in mind, look for an advisor that communicates with you regularly.
Making Your Voice Heard
Sometimes, you must find direction on your own. There’s no such thing as a question you shouldn’t ask. You should never feel as if someone is talking down to you or over you.
For instance, you might ask a finance professional a question. In response, you could face a condescending attitude easily noticed by the answer that came before you even finished your question.
It can prove disheartening to encounter such a negative experience. Naturally, you’ll want to talk with that person’s manager in such an instance. You also want to find another company to work with if the manager can’t find an employee who will give you the respect you deserve.
Everything You Do Matters
You must value all your contributions to the household. You’re more than what you contribute financially.
Also, if you’re in a relationship, your financial contribution matters just as much as your partner’s. As you would with your partner, it’s vital to ensure your family against the loss of your contribution to the household.
With this in mind, work with a financial advisor who conducts themselves professionally. They must value your many roles as a mother, wife, and professional.
Have Patience With Yourself
Financial empowerment doesn’t happen overnight. It isn’t a race. You must allow yourself time to make sound financial decisions.
Often, women struggle to balance their family life and careers. Lack of financial planning for these individuals isn’t necessarily procrastination. Often, women can feel overwhelmed, overextended, and overworked.
Also, choose a job that’s appropriate for your needs. It must offer you the flexibility you need to support your family. At the same time, it must also provide you with educational opportunities to help you meet your career goals.
Getting the Right Perspective for Financial Empowerment
In life, it’s vital to strive for balance rather than perfection. However, balance doesn’t mean that you must deprive yourself of most things you enjoy. It also doesn’t mean that you must always delay self-gratification.
Moreover, it’s about balancing what you consume today with what you anticipate you’ll consume in the future.
At the same time, you must plan for your future. Sometimes, however, you should indulge in a favoured luxury, like a spa day or simply time for a good read. These activities may serve as just what you need to find a balance to make you feel whole.
Eye on Your Career
You must advocate for yourself and your career. Women make up more than half of the workforce.
They’re also more likely to have a higher education level than men. They’re also more likely to work full time all year long.
Since entering the labour force, women have come a long way. Nevertheless, they still face challenges. Accordingly, you must take proactive steps to advance your career and negotiate pay.
Give Yourself a Gut Check
Often, women can feel insecure. They doubt their ability to perform at a high level.
They also feel pressure to perform at 100% at all times. These beliefs can lead to feelings of imposter syndrome.
In turn, women frequently undersell their capabilities and experience. One of the best ways to ensure you earn what you deserve is to maintain your confidence in your career skills.
Don’t Go It Alone
It’s helpful to maintain a circle of supportive female friends. Women who do so are more likely to become performers.
A solid professional network can help you attain a higher position of leadership. It can also help you earn better pay, making it easier to achieve financial empowerment.
A Win Is a Win
It’s important to reflect on your accomplishments and achievements. You should keep track of them in a journal.
Moreover, you should take time to reflect on those successes. When you review your wins, it helps you boost your confidence and achieve your long-term professional goals.
Goals for All of You
It’s also important to set—and meet—your personal goals. You’re more likely to feel confident in achieving your professional aspirations when you do so.
Still, it’s also vital to focus on your well-being. You must do so, even if it doesn’t feel like focusing on you will help you earn more or get a promotion.
Being Honest About Your Struggles
Everyone faces challenges in both their personal and professional lives. Sometimes, it helps to share your struggles with others.
When you share your troubles, you can find incredible support. You could also establish long-lasting friendships.
Credit Where It’s Due
At work, it’s crucial to claim credit for your ideas and achievements. However, doing so can prove difficult when you’re part of a big company or team.
Nevertheless, you must acknowledge your role. Still, you might feel like sharing achievements is showing off. But, on the other hand, you could also feel like you’re seeking unnecessary attention when highlighting your accomplishments.
If so, you must overcome these beliefs. Then, only you can ensure you receive recognition for all your hard work. Also, showing persistence and sharing your accomplishments helps overcome persistent gender equality and wage discrimination.
Taking the Lead
A few tips may help you start claiming credit for your work and spark discussions about your accomplishments.
For instance, you may have knowledge in a specific area. If so, show no fear when projecting yourself as an authority to your coworkers and peers.
You may not have academic knowledge about a topic. Still, what you know about a given area could prove more expansive than you realized. In addition, you can surprise yourself by sharing something new with a coworker in many cases.
You must also take ownership of your projects. No one can question who was responsible for its success when you do so. Taking ownership also shows others that you’re committed and passionate about furthering your professional development.
When with your peers, it’s important to discuss your accomplishments and projects. You must have confidence in sharing your contributions. In this way, you can ensure that none of your work gets overlooked.
Building Your Bank
Today, women make better salaries than ever before. However, they continue to receive less pay than men for equal work.
With this in mind, you must make your worth known and negotiate your salary. In doing so, you receive compensation that properly represents your abilities.
You should also ask for periodic raises. You’re twice as likely to get a raise if you ask compared to if you don’t.
What You Know and What You Feel
If you’re considering accepting a new position, you should always research the salary beforehand. Then, you can compare like positions to figure out what you should earn in that role.
For example, you can use a site like Payscale.com to figure out what companies are paying other people. The website will tell you what firms pay people based on their experience and position. You can use this information as a baseline for your salary negotiation.
Often, women strive to be 100% perfect. But unfortunately, in doing so, they also often doubt their capabilities.
Perfection is impossible. Trying to achieve perfection can lead to anxiety and stress.
The best thing to do is to believe in your abilities. But, more importantly, know that you deserve to earn the same as other professionals in your field.
Putting Your Foot Down
Historically, women are less likely to negotiate their salary when offered a job. Unfortunately, this circumstance can result in $650,000 to $1 million in lost earnings over a lifetime.
With this in mind, it’s critical to know your worth and negotiate with a tone that’s true to your personality. During the negotiation, you must stay positive. But, at the same time, you shouldn’t settle for less than what you deserve.
You won’t always receive the salary you desire when negotiating a job offer. As an alternative, however, you can ask your potential employer if they’ll put you on a three-to-six-month plan. In other words, you might ask the employer to meet your salary requests if you meet specific goals and accomplishments within this time.
Usually, women take on a large share of responsibility in a household. When they enter the workforce, these responsibilities continue. When adding career responsibilities to home life, work-life balance becomes critical.
You must maintain proper balance. If not, you’re more likely to experience burnout. Burnout can impact both your personal and professional life.
Balance looks different for everyone. Still, the following tips can help most people.
Be You Unapologetically
Your idea of work-life balance isn’t the same as someone else’s. You must recognize your thoughts and feelings to find balance.
First, it’s good to remove the pressure to do everything perfectly. You must accept that you’re human. Some days will prove less productive than others.
With this in mind, you must practice self-care. You must prioritize your mental and personal health over others. You must also create boundaries.
For instance, you could work more than eight hours every day. If so, you must think about whether you’re prioritizing your well-being. Doing so will enable you to perform your best at home and work.
Managing the Moving Parts
It’s essential to keep a flexible but structured schedule. This schedule includes dedicating time to needed activities.
You must prioritize your tasks to achieve this goal. When you can, you should delegate responsibilities.
You should also exercise caution about where and who you invest your energy. In other words, you must eliminate people and situations that don’t support your well-being.
For instance, you could feel burnt out. If so, give yourself permission to take time off and do something you enjoy.
Finding Like-Minded Souls
There’s a range of resources about financial independence for women, from guides to tools to mobile apps to courses. These resources can help you become more financially literate and independent.
For example, TwentyFree teaches millennial women to save, pay off debt, and invest. Meanwhile, Money and Mimosas teach financial wellness for self-employed women.
Nav.it is an excellent app that anyone can use to learn about finances. Hapi, meanwhile, can help you learn to invest in your child’s future. Finally, Savvy Ladies offers free financial resources that can help you control your finances.
Learn More, Do More
Hopefully, you’re now well on your way to financial empowerment. Yet, there’s always more you can learn.
Now that you’ve learned a bit more about women’s financial empowerment, please feel free to check out our guide on smart spending during special times like holidays, and don’t forget to subscribe to our blog!