Take Control of Your Finances: 7 Money Tips for Women+
Money management is a crucial skill for everyone, but it can be especially challenging for women+. More women+ report living paycheck to paycheck, women+ earn less than men, and they have a lower net worth than their male counterparts. The discrepancies are even more significant for women+ of color. While these challenges have societal causes that require societal changes, women+ can also use these seven money tips to improve their financial situation and build a more secure future by focusing on the things within their control.
7 Money Tips for Women+
1. Educate yourself about personal finance.
Knowledge is power. The more you know about managing money, the better off you’ll be.
Most of us didn’t learn much about money growing up because money management is not something that is often taught in school. However, it's never too late to start learning. By educating yourself about personal finance, you can gain the knowledge and skills you need to make informed decisions about your money.
There are a variety of resources available to help you learn about personal finance. You can read books and articles, attend workshops or seminars, or take online courses. Many banks and financial institutions also offer free financial education resources, so be sure to check with your bank to see what they offer.
2. Set financial goals.
One of the top reasons why people struggle to get ahead (other than lack of financial resources) is that they don’t set financial goals and priorities. Life is hard and it is easy to get caught up in day-to-day decisions and focus only on the immediate. Most of us get stuck thinking that we’ll deal with it later. We know we should be saving more, but knowing what to do and actually doing it are two very different things.
While it is totally understandable that people focus on the here and now, it makes it challenging to ever do more with your money.
Changing your financial habits and behaviors is hard, especially if you don’t have the right motivation. That’s why it helps to know what you want and why you want it.
Having clear financial goals can help you stay motivated and focused on building a secure financial future. When setting your goals, it's important to be specific, measurable, and realistic. For example, instead of saying "I want to save money," try setting a goal such as "I want to save $10,000 for a down payment on a house in the next two years."
Once you have set your goals, create a plan to achieve them. This might involve setting up automatic savings contributions, reducing your expenses, or finding ways to increase your income.
3. Create a budget.
Yeah, yeah, everyone knows you should have a budget. It’s the most tired and overused financial advice ever.
Unfortunately, there’s also some value in this advice. There’s not really any way of getting around the fact that if you want to take control of your finances, you have to know where your money is going and be intentional with where you want it to go.
Luckily, there are approximately eleventy-bajillion ways to budget, so you should be able to find a method that works for you.
The two most important things about a budget are:
Does it help you get the bills paid and prevent you from spending more than you earn?
Does it help you make intentional choices about where you want your money to go?
If you have a system that does those two things, you are good to go.
Click here for more budgeting tips.
4. Save for emergencies and future expenses.
Unexpected expenses can derail your financial plans, so it's important to have a rainy-day fund. Aim to save at least three to six months' worth of living expenses in an easily accessible account, such as a high-yield savings account. This can provide a buffer in case of unexpected events such as a job loss or a medical emergency.
To make it easier to save for emergencies, consider setting up automatic contributions to a savings account. This can help you build up your emergency fund over time without having to think about it too much.
In addition to your emergency fund, you’ll want to make sure you’re setting aside enough money to pay for upcoming expenses, such as taxes, insurance, back-to-school supplies and clothes, vacations, holiday gifts and celebrations, and other seasonal expenses. Planning ahead is the key to staying out of debt.
Related Resources:
5. Invest for the long-term.
Investing can help you grow your wealth over time, but it's important to take a long-term view and avoid trying to time the market. The stock market can be volatile in the short term, but historically it has provided strong returns over the long term.
You can get started by educating yourself about investing. Many DIY investors like to follow the approach of John “Jack” Bogle, founder of Vanguard. Bogle advocated for investing in low-cost index funds as a way of tracking the larger market and making investing easier and cheaper for regular people. Most large brokerage firms now have options and tools to help you if this is what you choose. (Note: this information is for educational purposes and should not be considered investment advice.)
Those who do not feel comfortable investing on their own or who prefer more in-depth strategies should work with a licensed investment professional or Certified Financial Planner.
6. Protect yourself with insurance.
Insurance can help protect you and your family from financial hardship in case of unexpected events such as illness, disability, or death. Consider purchasing health insurance, disability insurance, and life insurance to protect yourself and your loved ones.
When shopping for insurance, be sure to compare policies from multiple providers and read the fine print carefully. Look for policies that offer comprehensive coverage at a reasonable price, and consider working with an insurance agent who can help you find the right policies for your needs.
7. Negotiate for what you're worth.
Women+ often face pay disparities in the workplace, but by negotiating for what you're worth when it’s possible, you can help close the gap. Research shows that women+ are often less likely to negotiate for higher salaries or better benefits, but by advocating for yourself, you can sometimes increase your earning potential and build a more secure financial future.
When negotiating, do your research and come prepared with data to support your case. Practice your negotiation skills with a friend or mentor, and be persistent in advocating for what you deserve.
In addition to negotiating for better pay, consider negotiating for other benefits such as flexible work arrangements or professional development opportunities. By taking a proactive approach to your career, you can increase your earning potential and build a more fulfilling professional life.
Note: Sexism, racism, and other types of prejudice and discrimination in the workplace are real. Unfortunately, the advice to ask for a raise and negotiate is not always practical and has occasionally resulted in negative consequences. It’s important to evaluate your situation and make the best decision based on the risks and circumstances you face.
Society as a whole needs to work to change laws, policies, workplace rules, a ssumptions, and expectations to better support improving the financial position of women+ and women+ of color.
At the same time, by following these seven money tips, women+ can work toward taking control of their financial future and build a more secure and fulfilling life. Remember, financial management is a lifelong journey, and it's never too late to start taking steps to improve your financial well-being.