It’s never too late to transform your financial life. Women often have a lot on their plates, making finances another stressor in their lives. In addition, barriers are preventing financial resources and knowledge from being widely accessible to women, making tackling them even more overwhelming.
Focusing on women’s financial condition and providing guidance and assistance to stay on track, financial advisers can help women with secured credit cards in Canada to better their financial lives and take care of themselves. Understanding and consciously controlling your income, assets, and expenditure is important to reach your financial goals.
You must have the self-assurance and capacity to make both fundamental short-term financial judgments and long-term financial decisions for yourself and your family. But no need to stress! Follow this guide to help improve your financial life.
A closer look at women’s financial situation
Even while progress has been achieved, women and men still need to be treated equally in terms of finances. Women are powerful assets financially but are often underrepresented.
Here are some statistics depicting women’s importance but underrepresentation in the world of finance:
- Only 5.8% of S&P 500 CEOs are women, even though women were 84% more successful than males in essential leadership characteristics.
- 85% of women manage the daily money for their households.
- Women’s portfolios exceed men’s by 0.4% when they invest.
- Compared to 66% of white males, women of color make up only 3% of the C-Suite.
- Compared to 1.8 million males, more than 2.3 million women have quit the workforce since the start of COVID-19.
The financial challenges that women face
Personal empowerment through financial freedom is possible, but many barriers prevent women from navigating and participating equally in the financial world.
For instance, according to data from the U.S. Bureau of Labor, women earn 82.3% of what males make yearly, with many women of color making even less. Women deal with challenges such as pay inequality and a lack of access to financial resources.
Positive movements that support equal rights for men and women exist, but entrenched social institutions are challenging to overcome.
The list that follows explains some of the significant difficulties:
- Women are paid less than males.
- Women are less likely to be financially literate.
- Women participate in finance programs at a lower rate than men.
The U.S. Bureau of Labor Statistics reports that there is still a pay gap between men and women, with the former earning less money. The gender gap grows for women of color. Additionally, women are less likely to engage in programs leading to professions in finance. For instance, men study economics at a ratio of roughly 2:1 to women.
Ways to improve women’s financial life
Women often have more financial management knowledge than they believe. While specific financial decisions are best made at particular times of life, other tactics may be used at any time.
Increasing financial literacy is frequently the greatest method to create a financial strategy. According to Fidelity, only 20% of the women believed their parents had adequately educated them to manage money as adults.
A lifetime safety net may be created by setting financial objectives and comprehending short-term, medium-term, and long-term money management techniques. Starting to budget, invest, save, and prepare for retirement are essential steps in achieving financial freedom and prosperity.
Here are 6 financial wellness steps you may use at every point of your life to look after yourself and your family.
1. Balance the budget
A balanced budget (i.e., a financial plan) is one in which income and expenses are equal, and there is neither an excess nor a shortfall. Although any institution earning operating income and incurring operational costs qualifies for a balanced budget, it is the most frequently used for government budgets.
The act of budgeting itself is viewed as being negative and restrictive. There’s a misconception that if you stick to a budget, you’ll have to give up the things you value most.
Budgeting is just a way to prioritize what you want to spend your money on and what you don’t.
Women also tend to talk negatively to themselves because of past financial missteps. They can assume it’s impossible for them if they attempt a budget and it doesn’t work.
However, if you’re stuck in the past and resistant to change, budgeting will be difficult for you, and you’ll keep falling into the same bad habits.
Tips for balancing your budget
- Make a budget with a basic Excel spreadsheet or something a financial advisor creates for you. It doesn’t matter how much money you make if you don’t understand your financial situation.
- Examine your bank records and identify the sources of excessive spending.
- Maintain a budget and keep track of your spending which might assist you in making sure that your expenditure fits the lifestyle you’re attempting to build.
- Set up “out of sight, out of mind” automated savings accounts as a forced way to ensure money is placed away each month because having too much access all the time may also be a problem.
- Maintain an emergency fund to cover short-term needs for three to six months, such as rent, bills, auto payments, and the mortgage.
In addition, if you want to invest in a tax-free savings account (TFSA), make sure the funds are growing instead of sitting in cash so you can take advantage of the TFSA’s full potential for tax savings.
Others argue that you should pay off your debt before investing, but you can do both doing both. Yes, it would help if you focused on paying off high-interest debt first, but you can also create a tiny nest egg while doing so.
2. Invest with confidence
Investing may seem overwhelming to get started in especially for women. The ideal storm is created when you combine the complexities of investing with an industry that generally talks down to its customers, and women in particular.
We must first acknowledge that these inadequacy emotions in women result from cultural influences rather than intrinsic causes. Here are some tips to help start investing to improve your financial life.
Tips for successful investing
- Recognize that you don’t need to know how to trade or calculate bond rates to be a smart investor.
- Determine your goals first, and then how much money you will need to save in whatever type of account to attain them.
- Another important decision is if you require an investment platform where you handle everything alone or one where you receive instruction, help, and interaction. In actuality, both men and women frequently require the latter.
3. Set boundaries in relationships
Women may be breaking gender barriers in the workplace, but relationships can complicate their financial lives. Their relationships with their partner, kids, and friends may make their finances feel out of their hands.
Many may have given up control of the finances because they were more successful than their partners and wanted to balance the power relationships. Because they don’t have a strong grasp on their money, they may have partnered with credit card balances at their limit or are generally draining them financially. There are also divorced women who are burdened with some guilt and unaware of how much money they spend on their kids.
Tips that work for relationship-building
- Establish the ground rules right away.
- In addition to a marriage or premarital agreement, update your will and ensure both parties are transparent about costs and who will pay what.
- Ensure that everyone agrees on what constitutes discretionary expenditure, who will take maternity/paternity leave, and how long.
There are more severe problems if you can’t discuss these topics with your spouse or partner at the beginning of a relationship.
On the other hand, when a relationship ends, keep it “human” at all times since, especially when children are involved, having peace cannot be bought with money. Maintain in mind the little things while haggling, such as who gets to keep whose memberships and who receives the loyalty points.
Regardless of what your divorce agreement states, creditors will still hold both of you jointly responsible for any debt on joint accounts.
4. Plan for retirement
Many people don’t grasp the importance of saving money early enough; the sooner we begin a financial plan, the more money we’ll have saved up for retirement.
Women continue to earn much less than males. Therefore it is understandable why they must work longer before retiring. The length of maternity leave and the time spent raising children will also affect long-term wealth creation.
In addition, as we become older, women worry more and more about leaving enough for the kids. We’ve seen elderly moms aid their adult children time and time again at their own financial expense. This makes saving for the future especially important, as you may have unexpected expenses into retirement.
Tips for retirement planning
- Beginning five to ten years before retirement, minimize investment risk. Many people have found themselves in high-risk investing circumstances only to discover after retiring that the market has declined, forcing them to either reenter the working or liquidate their holdings.
- Have a well-thought-out strategy in place before you quit working.
- Try a slow-tiered retirement where you work a few days a week for a few years if your employer permits it. Right now, businesses have a lot greater desire to permit such to keep some skill sets.
5. Examine your credit score
Find out what your credit score is if you don’t already know. Lenders use your credit score to decide how much to charge you for borrowing money. Your credit score is mainly based on your past payment history and the total debt you owe.
If your score is poor, you should anticipate paying a higher interest rate, possibly a considerably higher one, for items like credit cards, mortgages, and auto loans.
Experian, TransUnion, and Equifax are the credit reporting bureaus where you may get a free copy of your credit report.
And if you discover that your score is poor, take immediate action to increase it by keeping your credit card balances low, paying off debt, paying payments on time, and checking your report for any errors.
6. Improve your financial literacy
To improve your financial life it’s important to gain knowledge regarding financial issues. Discussing money with loved ones, close friends, and other trustworthy individuals is a great way to learn more. By listening to other people’s stories, you may discover a lot about how you feel about money and how you handle your finances.
Here are some ideas to increase your financial literacy:
- Tap into your network. Discuss your experiences honestly with money and financial stability with other women.
- Utilize expertise and experience in your community. For practically any topic, there are free materials and online learning platforms accessible.
- Read blogs, books, and podcasts to comprehend the terms and tactics used in finance and investing.
Start planning now
It’s never too late to begin prioritizing and planning your financial goals. The hardest part of financial planning for women is frequently knowing where to start.
Our greatest investment is in ourselves, so making time to develop interest, locate professional partners, and create a strategic plan for the future will undoubtedly provide a positive return.
Planning will allow you to meet your goals and improve your financial life. A wealth manager may assist you in developing a financial strategy by reviewing your data and learning about your priorities.
Your financial plan should change as you do. Although you can’t know what the future will bring, you can make decisions that can increase your financial stability. Start thinking about financial goals now to be prepared for the future.
Additional articles you might be interested in:
- 8 Easy Ways To Boost Your Personal Finance
- 4 Helpful Tips For Thinking About Your Retirement Finances
- 5 Strategies Used By Successful Women Entrepreneurs To Save For Retirement
- How Credit History And Credit Age Impact Your Credit Score
- How To Get Your Credit Card Debt Under Control
- 5 Ways To Improve Bad Credit
- 4 Reasons Why You Should Outsource Your Finances
- How To Take Charge of Your Finances: Online Loans Explained
- Top Factors That Will Get You A Loan Now
- How To Establish Your Credit Score For Quick Cash Loans
- How To Save Money When Taking Out A Title Loan
- 7 Common Mistakes Everyone Makes In Online Loans With Monthly Payments
Alaine Meier is a blogger at LadyBossBlogger. She graduated from the College of the Holy Cross with a BA in Economics and a minor in Environmental Studies.