At Magenta it’s our experience that women today are juggling several priorities: career, family, friends and other obligations. Often, finances and investing gets lost in the shuffle, meaning women tend not to be ensuring that the money they are working so hard for, is working hard for them.
Recent research in the U.S. found that only 4% of women lead their family’s investment strategy. Among affluent women, 80% consider themselves “beginner investors,” compared with 50% of men.
As a female financial planning practice, we would like to think as times change and female empowerment is encouraged, that it would be different for younger women. Sadly, the statistics are still indicating it’s not. Only one in eight “Gen Y” women (born 1978–1988) call themselves the primary decision maker when it comes to personal finance, with only 9% saying that they are confident about managing investments.
And yet, owing to changes that will inevitably happen in our lives, up to 90% of women will have to manage their finances on their own at some point in their life. They may leave the workforce or go part-time to raise young children or care for a sick family member, become divorced or find themselves widowed.
We have experienced first-hand that at these times and pressure points, lack of financial knowledge and confidence can leave you vulnerable and open to poor advice, making mistakes and being very confused and anxious. So how can women learn to take control of their financial future?
1. Believe in yourself
Finance and financial planning doesn’t have to be scary. It’s not something men are naturally better at or understand easier. It may seem intimidating, but it’s not hard once you begin.
It’s all about setting goals, creating a long-term plan and sticking to that plan. These are things women are especially good at and once you ‘get it’ you will excel at it!
2. Start researching and learning
In a world where you can YouTube just about anything, researching new stuff is easy. Watch Ted Talks on managing money, read books, attend a seminar or use an app to get you started.
Begin by budgeting, setting goals and start saving towards those goals – maybe start with smaller amounts first and then, when you know you can commit, think about investing. You can work with a financial planner to understand this in more detail and how to really create a financial plan.
3. Just talk about money baby!
We’ve written multiple blog posts about the importance of talking about money.
Bizarrely, we are more likely to talk about a whole range of personal issues – our weight, our sex life, our mental health BEFORE we share information about our money.
If you are married or in a relationship, don’t just defer all financial matters to your partner. You don’t have to be equally engaged day to day if you don’t want to be, but you should have regular conversations about money and establish a core understanding of your goals and required savings/investments.
If you aren’t in a relationship, talk to people you trust (your parents, your friends or colleagues) who may have some experience and chat though your concerns, so that you can start to understand more.
4. Get started early
There’s no getting around it, the earlier you start to save and invest, the better.
Financially you’ll be better off, but also, for confidence and understanding, the earlier you start getting your head around your finances and the impact any changes in your circumstances could have on your future, the more confident you will be and the more capable you will be when you may be faced with complex decisions or situations for you and your family.
5. Make it one of your priorities
Women are fabulous at multitasking, but sometimes we lack focus about the key priority – getting easily swept away being so busy.
Working hard to live the life of your dreams involves juggling work, career advancement, family time and fun time – and this is tough. BUT finances are the backbone behind the true success of all of these things. Take control of your dreams by taking control of your finances. It will be worth it!
If this resonates with you, but you just don’t know where to start – pick up the phone and speak to us for a friendly chat.