Feeling financially empowered is important for everyone, but women have some unique hurdles that can hamper their confidence with money.
Here is a roundup of my top financial planning tips for women looking to improve their money situation and feel more in control of their financial destinies:
Financial Planning Tips for Women: Start Money Conversations Early
It’s often said that girls are taught to save and budget, while boys are taught to earn and invest. One of the best ways to give your children a more holistic understanding of both earning and saving is to involve them in conversations about the family budget and financial goals.
Not only does this help the next generation (and you!) see that it’s not taboo to talk about money; it also shows that men and women should be part of that conversation.
The sooner we can teach our daughters about the fundamentals of earning and investing, the easier it will be for them to consider it a part of their financial skillset.
Here are some additional tips for talking to your children about money.
Get More Involved with Your Finances
Women are much more in control of their money than ever before. According to a GoBankingRates survey, 90 percent of women either controlled household finances, or shared that control with their partner.
However, about 58 percent of women still leave the major financial decisions up to their male partners, according to a study from UBS Global Wealth Management.
If you don’t take an active role in your family’s finances, start by making a habit of reviewing your accounts, keeping track of bills and talking regularly with your partner about your budget and money goals.
It’s very important that both partners are aware of the financial situation and involved in making those decisions, because if one of you passes away or leaves, the other person would need to know how to continue managing that money.
Set Bigger Money Goals
A study of men’s and women’s financial behavior found that women set savings goals far lower than men, have a lower risk tolerance in investing, and express less confidence in investing than men do.
If you find that you’re playing it small with your money goals, challenge yourself to think bigger. One of the best ways to boost your self confidence is to achieve a goal, so even checking off small money goals will empower you to set more.
But you don’t have to do it alone. If you’re nervous about investing or unsure of where to start, consider working with a financial planner to help you get on the right track.
Negotiate Your Salary with Confidence
Salary negotiation is still a challenge for many women. According to a Glassdoor survey, only 46 percent of women negotiate their initial salary offer, compared to 52 percent of men. The survey also found that when women do negotiate their salaries, they ask for 30 percent less than men do.
So, how can you negotiate a salary or a raise with confidence?
First, arm yourself with the information that will make you feel more confident:
- What do people in your field tend to make in your area?
- How many years have you been in your current career?
- What experience and qualifications do you have?
- How long has it been since your last raise?
- If you’ve been with a company for a while, what accomplishments have you achieved since you’ve been there?
Advocate for yourself and know that sometimes, just doing good work will not be enough to get you more money. You have to ask for what you want. Knowing the facts will help you present your case.
Note for medical professionals: Think about hiring someone to help you negotiate your contract when you’re considering a new position.
Taking Time Off
Women are still the primary caretakers, both for children and other family members. Over 80 percent of all caregivers, both professional and personal, are women. And in couples where both partners work, women still spend 40 percent more time caregiving than their male partners.
This gap in caretaking and time off is still a major hurdle for many women’s careers. That being said, some companies are putting plans in place to ease that struggle.
When you’re considering a career or a job at a new company, make sure you look carefully at that company and how they handle time off. It can also be helpful to look into companies whose workforce is made up of many women, or whose values support flexibility and family and medical leave.
Be aware of your rights under the Family and Medical Leave Act (FMLA,) including up to 12 weeks of unpaid, job-protected leave per year for qualifying employees for a medical reason, the birth of a child, or to care for an immediate family member with a serious health condition. Group health benefits must also be maintained during the leave.
FMLA does not require a company to pay you during your leave. Consider short term disability insurance to supplement your pay if you need to take time off.
Financial Planning Tips for Women: Saving for Retirement
Did you know that on average, women save three times less than men for retirement? One of the main reasons for that disparity is that women make less money to save during their careers. In 2024, for every dollar men earn, women earn 84 cents.
Women are also more likely to work part time or lower paying jobs that do not offer 401(k)s or other retirement plans. Even if your spouse or partner has a retirement plan, it’s important to have your own retirement savings.
Women tend to live longer than men, too, so they need to prepare to cover living and medical expenses for more time.
Finally, women are also more likely to keep their savings in cash instead of investing.
The good news is that there are investment options for every income level. The sooner women can start investing and preparing for retirement, the better chance they have to maximize that money.
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and fee-only financial planning. For more information on the services offered, contact Katie today.
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