Empowering Breadwinner women and their Financial Futures - Top 10 Personal Finance Tips for Women in Honor of International Women's Day
This March 8, 2024, we will be celebrating International Women's Day. Did you know that the first International Women’s Day was in March 1911, over 100 years ago!
This year, the theme is ‘inspiring inclusion’. Globally, we will be asked to truly include women – no matter their faith, ethnicity, age, or ability. Please discuss this with your loved ones – we can all make an impact on the world around us.
As we commemorate this day, it's crucial to highlight the importance of financial empowerment for women. Despite progress in gender equality, women still face unique challenges when it comes to personal finance.
If you’re located close to Boston, we’d love to invite you to our in-person event. Come network with other amazing women, and learn more about investing in women. While the event is free, we are asking for voluntary donations of feminine menstrual products that we will donate to a local charity. Sign up here.
This blog aims to provide valuable insights and practical tips to empower women in managing their finances, fostering independence, and building a secure future.
Increase your financial literacy.
I’ve always said that we do a TERRIBLE job in this country when it comes to personal finance literacy. Why don’t we mandate that our high schoolers and college kids pass a “Personal Finance 101” class to graduate?
In any case, the foundation of financial empowerment for women begins with education. Understanding basic financial concepts and strategies can significantly impact long-term financial health. Take the time to educate yourself on topics such as budgeting, investing, and debt management.
I have some great resources to share, that are presented in a NON-JARGONY fashion. I also pride myself in translating industry language into layperson speech – and I love to nerd-out on personal finance topics, so don’t ever hesitate to reach out to me to ask questions.
Create your cash flow statement.
As a financial planner, I work with my clients to understand their “free cash flow”. This is not always easy to arrive at – but we have tools that can help. Once we’ve determined that we have an excess of money coming IN, versus money going OUT, or positive free cash flow, we can decide how to best put those funds to work for our unique situation – whether paying down debt, investing for retirement, saving for college, or anything else that is important to you!
I believe that as women we tend to put everyone else ahead of us – but I’m a huge proponent in helping women figure out what it is that is important to THEM – and then working with them in the right direction.
Build your emergency fund.
Building an emergency fund is a crucial aspect of financial security. Having a safety net in place can provide peace of mind during unexpected situations like medical emergencies or job loss.
I’m more conservative than many other advisors, in that I like my clients to have 12-18 months of living expenses saved. The nice thing given our current interest rates is that you can actually earn some income on those funds, while keeping them conservative and liquid. This financial cushion acts as a buffer, preventing the need to rely on credit or loans during challenging times.
Negotiate and invest in yourself.
Women – this is one area where we should rely on friends and mentors to support us in our Investing in your skills and education can significantly impact your earning potential.
Personal story -- You may know I have 4 young adult daughters of my own. My youngest texted me saying that the website of her employer shows a higher pay for her qualifications than what she was receiving. Upon discussion, she crafted an eloquent email to her boss, explaining why she was underpaid, and asking for her pay to be backdated to the date she received those qualifications.
Her boss agreed to her demands, as he should. So hurray for her – she is learning that NO ONE will advocate for you except YOU.
I did take some personal credit for being a good coach for her, until she said, ”Oh cool – what am I going to treat myself to now with that extra cash?!” (we were SO close! Just kidding – I’m proud of her for making the ask. We will continue to work together on long-term investing strategies J)
It’s not always easy. But do your research, and make sure you negotiate for the pay and benefits you deserve, or, if you’re a business owner, make sure your fee schedules accurately reflect your expertise.
Some other tips for women in their careers and business ownership:
· Network!
· Connect with mentors.
· Pay it forward.
· Be a life-long learner – obtain certifications or further education in your field or your interests! By staying competitive and continually improving your skills, you position yourself for career advancement and increased financial opportunities.
Start as early as possible to plan for retirement, or simply OPTIONS.
Retirement may seem like a distant reality, but planning for it early is essential. Sometimes, for younger women, ‘retirement’ can be an esoteric concept. So I like to say, “Plan for options.” – The earlier you get money invested and working for you, the longer those funds have to accumulate compound growth. You may have a time in your life when adding to savings is difficult – but by starting as early as possible, we have some room for flexibility in our personal situation.
Further, women often live longer than men, making it crucial to accumulate enough savings to support a longer retirement period. Take advantage of employer-sponsored retirement plans, like 401(k)s, and contribute consistently. If self-employed, explore options like SEP Individual Retirement Accounts and Solo 401ks – they can offer both tax savings and long-term growth of investments.
For corporate breadwinners - understand and fully utilize your offered benefits.
Be aware of the benefits offered by your employer, such as health insurance, retirement plans, flexible spending accounts, and, my favorite, Health Savings Accounts (HSAs). Many of my clients often receive legal benefits as well, which can be helpful when engaging with an estate planning attorney.
Strive for financial independence.
Strive for financial independence to ensure you have control over your financial decisions. This involves managing your own income, investments, and assets. Whether you are single, married, or in a relationship, having financial independence provides a sense of security and the ability to make choices aligned with your values and goals.
And life happens! I’ve had way too many clients experience unanticipated unfortunate events such as a loss of spouse or divorce. So please, take control of your financial situation so you’re not left in a lurch should something sad or bad happen to your life unexpectedly.
Evaluate your debt management goals.
While my clients typically have at least some form of debt, managing it wisely is crucial. Prioritize high-interest debt repayment, such as credit card balances, to avoid accumulating unnecessary interest charges. Explore strategies like debt consolidation or refinancing to simplify payments and potentially lower interest rates. We can discuss your options and prioritize debt payments – which can be a stress reliever.
Partner with a Financial Director aka financial planner.
My clients and I work on creating their own unique, financial portal where we can see all of their financial puzzle pieces work together – or, to use my favorite bee analogy, we manage their financial beehive in a way that gets each honeycomb working synergistically with the hive. I love to function as my clients’ financial director, financial property manager, working closely with the Queen Bees of their financial beehives.
And if you have a life-partner, open communication about finances is vital. Collaborative financial planning ensures that both partners are on the same page regarding financial goals, budgeting, and investment decisions. Working together fosters a supportive environment and helps build a strong financial foundation for the future.
Diversify and invest aggressively.
Investing is a key component of building wealth over time. Women tend to want to invest conservatively, and I’ve seen way too many women arrive with solutions that did not keep up with the market. I love educating women on the benefits of investing aggressively, and for the long run, when appropriate for your unique situation.
In conclusion, International Women's Day serves as a reminder of the ongoing journey toward gender equality. Empowering women in personal finance is an integral part of this journey. By focusing on financial education, budgeting, investing, and collaboration, women can take control of their financial futures. As we celebrate the achievements of women worldwide, let us also encourage and support one another in achieving financial success and independence. Together, we can build a future where women are financially empowered, breaking barriers and creating opportunities for generations to come.
💪🏽 Go women!
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.