Woman, Daughter, Sister, Mother, Wife, Partner, Friend and the list could go on, but you get the point. These are all terms that help to define and shape us as women. These labels often shape where we end up on the financial side of the equation. Women as a segment are earning higher wages and more advanced degrees than any other time in history, yet there is still a disparity in our behaviors and confidence about money. In a 2013 study of affluent women, 91% said that it is important that women are confident in their ability to invest, however 41% of those same women said they are “not at all” confident in their investing ability1. Here are a few steps to help you increase your confidence about making financial decisions.
Step 1: Acknowledge Your Worth – the first thing you have to do is take a realistic look at where you are. Generally speaking, women are 33% more likely to earn a college degree than men2. Of affluent women surveyed, 20% earn about the same as their spouse, while 24% earn more1. Women should be proud of the progress that we are making and take that as a confidence builder. The same characteristics that have led to an increase in college graduation and earning should lead to increased confidence in the management of money. Repeat after me, “I am Worth it, I Can do this!”
Step 2: Analyze Your Worth – now that you realize you have worth and something to be confident about, its time to take a look at where you are financially. Many people put more time and energy into planning events like birthday parties and vacations than they do planning their financial future. Just like you wouldn’t set out on a road trip without a final destination in mind, you have to create goals around your finances. These goals are your final destination. Whether you are in need of a monthly spending plan to stay on track and reduce high interest debt, trying to balance saving for college and retirement, or facing the reality of the cost of caring for an aging parent, a comprehensive plan will help you navigate accomplishing these goals. Repeat after me, “I am Worth it, I Will create a plan!”
Step 3: Accumulate Your Worth – finally, the plan is in place and now it is time to talk about the steps toward building and growing your net worth. The first thing that you want to do is build your emergency fund with six to nine months of income. This will help you to keep your plan on track should some unforeseen expenses arise. Next, look at the benefits of investing in financial vehicles, such as an IRA, that offer tax advantaged features and benefits to help grow earnings faster. It’s never too late to start, and there is no harm in seeking the help of a professional. Repeat after me, “I am Worth it, I Will invest my money so it can work as hard for me as I do for it!”