Are you struggling with your financial confidence? Looking for ways to increase your financial confidence as a woman? If so, then this article is for you.
When I became a stay-at-home mom, I struggled with my financial confidence too. I found myself responsible for managing our money, as well as caring for my children.
I had to admit to myself that I wasn’t as knowledgeable as I thought in certain areas of money management.
This led me to research, read, and take courses on personal finance so that I could better myself. I hope that you’ll learn something from this article and use it to better your life as well.
In this article, I discussed with some industry professionals to learn how women can increase their financial confidence. I spoke to financial advisors, financial therapists, investment educators, and tax advisors on the topic.
They provided me with some helpful information that I’ll share with you today.
Keep reading to find out!
What is financial confidence?
Financial confidence is trusting in your ability to manage your money, and make it work for you. Financial confidence comes from having financial literacy.
John Shrewsbury, a certified financial advisor said “financial confidence comes from having a clear picture of how you can financially navigate an uncertain future”.
This may be having enough money in savings to weather losing your job and being unemployed for 3 months. For an older person, it might be having enough money saved for retirement.
It’s only through learning about money (either from a young age or through courses in school) that you can truly be confident in your ability to manage your money.
When you’re confident about your finances, you’ll be able to make good decisions about your personal finance and invest in your future without fear.
How do I measure my level of financial confidence?
Your level of financial confidence can be measured by how knowledgeable you are about how to invest, save and borrow money wisely.
Women who understand all their investment options and can plan for their future are more financially confident than those who don’t.
If you have a lot of money sitting in the bank that you don’t know what to do with, then your level of financial confidence is low. This is because you’re not actively investing in your future, and making your money work for you.
Why are women generally less financially confident than men?
There are many reasons why women tend to have a lower level of financial confidence compared to men.
The media shows men as more successful than women
May Fairweather, a financial therapist said “Media representations of financial success are usually centered around men”.
Most professions that lead to financial success are traditionally viewed as being male-dominated, like investment banking or surgery.
Media stereotypes and cliches present women as frivolous with trivial interests and no ability to make good choices. These narratives get into the heads of women and contribute to low financial confidence.
Women are overburdened by domestic duties
The burden of domestic duties usually falls on women, whether they’re stay-at-home moms or moms who work outside the home.
Adding the burden of managing the finances is something that most women don’t want to do, due to their already high workload.
Avanti Shetye, a certified financial planner said that “women don’t seek out financial education because they are unwilling to take on the responsibility of managing finances in addition to everything they are already doing for their families.
The lack of financial education makes them less financially confident compared to men, even though there are studies that show that women make better investors than men over the long run”.
Lack of financial education leads to low financial confidence
When women aren’t taught personal finance in school, they grow up to become adults who don’t know how to effectively manage their finances.
They have to play catch-up as adults by learning on their own. This significantly reduces their financial confidence.
Juliann Gumulak-Smith M.S., founder of the investment academy for women said “Many women have never been taught about financial literacy. Some states (such as New York and Virginia) are now requiring a personal finance course as a high school graduation requirement to help fill in this gap.
Lack of discussion about money growing up
There is a popular saying in Nigeria that “everything begins at home”.
If you want women to grow up financially confident, then you have to start discussing finances with them from a young age.
It’s our responsibility as parents to teach our kids the importance of money, how to earn it, and how to multiply it once you do.
When there is no lesson on money growing up, women will leave home with a low level of financial confidence. They’ll accumulate debt without knowing how to pay it back.
They won’t know how to invest, and they’ll overspend on things they don’t need.
Lack of a plan for your money
Ms. Gumulak-smith, an investment educator said “Many women go through their life and don’t have a real plan of where they want their money to go. They do not give their money a purpose. They may falsely assume their partner is a better investor than they are and often let their partner handle it”.
If you want to increase your financial confidence as a woman, you need to come up with a plan for your money. The best way to do this is to work with a financial advisor.
Why is it important to increase your financial confidence as a woman?
It is important for women to increase their financial confidence so they can take control of their financial future.
Bank of America did a study where they analyzed how financially confident women were about their future. Here’s what they found.
Most women reported that they were confident in managing their day-to-day finances like managing a budget (53%) and paying bills monthly (70%). But most women struggle with managing their long-term finances according to the report.
44% of them struggle to save for emergencies, 36% of them struggle to save for retirement, and 44% of them struggle to pay down their debts. 27% of them struggle with building wealth (source)
When you have financial knowledge, you’ll be able to invest in things that’ll grow your money for the future.
Another reason women should increase their financial confidence is that they’ll pass on their knowledge to their children.
Our children will learn how to handle money from watching what we do, and this will help break the generational cycle of low financial confidence among women.
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How can you increase your financial confidence as a woman?
Understand your money mindset
A lack of confidence comes from childhood, and there can be layer upon layer of subconscious beliefs and unhelpful thoughts attached to it.
When talking about a money mindset, it’s important to ask these questions: How is your emotion linked to your spending? What are some of your beliefs about money? How does it relate to your upbringing?
May Fairweather, a financial therapist, works with women to help them disprove some of the negative self-talk they have about money.
“Looking for the evidence that proves or disproves any negative self-talk can be helpful. For example, if a woman has the belief “I always waste all my money on things I don’t need”.
She could list all the unnecessary purchases she made in the last month under the Prove column.
Then she could list all the things she spent money on that were important, and also all the times she decided not to spend on something she wanted under Disproves.
Finally, she could rewrite the belief to read “I get to choose how I spend my money, and sometimes I choose things that make me happy”.
Admit your limitations regarding your financial knowledge
Being honest with yourself about the fact that you don’t understand all areas of personal finance, is the first step in increasing your financial confidence.
As long as you’re open and willing to learn, you’ll be able to fill the gap with all the resources out there to help you. Try making a list of all the things you want to learn about regarding your finances, before going out to seek help.
Learn to budget and live within your means
Learning to live within your means will help prevent you from overspending and worrying about money.
Budgeting is one way you can learn to live within your means. It’ll also help increase your financial confidence as a woman.
When you budget and track your spending, you’ll have a better insight into where your money goes each month. You’ll also be able to save for a rainy day.
Read this article to learn about how to use the cash envelope system to budget effectively.
Don’t let your spouse make all the financial decisions
If you want to increase your financial confidence as a woman, you need to stop letting your spouse make all the financial decisions.
I know women are faced with a lot on their plate with raising the kids, housework, and earning money.
Sometimes we don’t want the extra burden of managing the money too. But the only way you’ll learn about money is by being involved in how it’s spent and invested.
Don’t feel intimidated to ask when you don’t understand a certain aspect of your family’s financial plans in regard to budgeting, investing, and managing wealth.
The more you learn, the more financially confident you’ll be.
Educate yourself about personal finances
There are many ways to educate yourself about personal finance. You can read books, watch Youtube, read blogs, etc. You can also take a course about personal finance.
I recommend taking the online financial literacy course called FinancialFit. It’s a wonderful online course that teaches you all about managing your money.
Each module is 5-10 mins long, and they’re explained in an easy-to-understand format.
Some of the topics covered include managing debt, planning for the future, building credit, and budgeting as a couple. I definitely recommend it to any woman who wants to increase their financial confidence.
Listen to personal finance podcasts
One way to learn more about financial topics is to listen to personal finance podcasts. You can search the keyword “personal finance” on any podcast app, and you’ll find tons of them.
A personal finance podcast will teach you all about building wealth, planning for retirement, saving money, and paying off debt.
Learning about all these things will help increase your financial confidence as a woman.
Talk to your partner about money
Make it a point to have regular meetings with your partner where you discuss the current state of your family finances.
Talk about any area of concern that you may have, and share any knowledge you’ve learned that could help build more wealth.
Ask for more financial education from your employer
Lisa Niser, a tax advisor suggests “asking your employer to include financial wellness workshops as part of their benefits package”.
When young people join the workforce, they tend not to fully understand all the benefits their jobs come with.
I had a friend who at 27 didn’t understand what a 401K was. She didn’t even know whether her employer was contributing to it, and if so, how much.
This is not an isolated incident.
I’ve come across many women who have no understanding of their benefits, so they miss out on opportunities to increase the money they’re saving for retirement.
That’s why it’s a great idea to ask your employer to host financial wellness workshop for all employees. This is one of the best ways to increase your financial confidence as a woman.
Through this workshop, you’ll learn about your employment benefits, and actions you can take to plan for retirement.
Hire a money coach
If you struggle to create and stick to a budget, then a money coach might be able to help. They can create a personalized budget plan fitted to your lifestyle, and help you learn how to stick to it.
Hiring a money coach is a great way to increase your financial confidence as a woman. You won’t have to navigate the world of personal finance alone.
Learn to break bad money habits with a financial therapist
If you have any bad money habits, working with a financial therapist will help you break them. Some bad money habits are online shopping when you’re bored, engaging in “retail therapy” to feel better about yourself, etc.
These habits set you back financially, and they reinforce the stereotype society has about women not being good with money.
When you learn to break your bad money habits, you’ll be more financially confident as a woman.
Consult a financial advisor to help manage your money
If you have a specific financial goal, then a financial planner can help you achieve them. The job of a financial advisor is to help you build wealth through planning for retirement, saving for major expenses, investing, budgeting, and so much more.
Get rid of toxic debt
Toxic debt means debt that is not tied to life satisfaction that brings you a lot of stress. An example of toxic debt would be credit card debt that’s out of control, overdue bills that aren’t being paid, etc.
A money coach may be able to help you get rid of your toxic debt. They will help you create a budget and monitor you to make sure you stick with it.
Having control of your debts will help increase your financial confidence, and set you on a part to financial freedom (Yarelys Tifa)
Build an emergency fund
One reason women aren’t financially confident is that they don’t have emergency funds. When you live from paycheck to paycheck, it can be difficult to save up for a rainy day.
This doesn’t mean it’s impossible.
One way to build an emergency fund is to choose the right budgeting methods. There are 4 main types; 50-30-20 budget, cash envelope system, zero-based budget, and pay-yourself-first. See here for more details.
Lisa Niser, a tax advisor suggests that a woman should have enough money saved in her emergency fund, to cover 3-6 months’ worth of expenses.
Plan for your retirement
Nothing helps you build your financial confidence as a woman more than planning for your retirement.
When you have a retirement plan, you won’t be afraid of getting older or leaving the workforce.
You’ll always be confident that your money is growing safely, ready to take care of you when you need it in the future.
Even stay-at-home moms can plan for retirement. You don’t need to be working a 9-5 to be able to do so. Check out this article I wrote on all the ways stay-at-home moms can plan for their retirement.
Build your credit
Another thing you can do to build your financial confidence as a woman is to build your credit.
When you have good credit, you’ll be able to do things like leave an abusive marriage, rent an apartment, buy a house, get a car, and even a private loan.
Having a good credit score gives you confidence about your future.
Stay-at-home moms can build their credit scores too, even if they earn no income. Check out this article to learn how you can build credit as a stay-at-home mom.
Don’t be afraid to talk about Money with friends and family
Talking about money with friends and family is a good way to build your knowledge and financial confidence as a woman.
We need to disrupt the idea that money talk within family and friend groups is a taboo subject. If we don’t talk about money, we’ll never learn from each other.
We can have conversations about the stock market, different investment options, and ways we can save money. Don’t be afraid to ask questions when you don’t understand a topic. That’s how you’ll learn.
Use money-managing apps
Nowadays there are numerous apps on the market that’ll help you learn about money, and how to invest it. These apps will help you manage your personal finance, which will, in turn, increase your financial confidence as a woman.
You can find apps for budgeting and investing on the App Store. There’s even an app called Stackin’ that’ll help you build a better money mindset.
Negotiate your pay
There’s nothing more powerful than negotiating your pay after being offered a job. Many women are afraid to do this, and it contributes to the gender pay gap.
If you want to be more financially confident as a woman, you need to ask for what you deserve. You should never be afraid to negotiate a pay raise or ask for a promotion at work if you think you deserve it.
Celebrate your wins no matter how small
It’s important to celebrate our wins as we try to increase our financial confidence as women. May Fairweather, CFT, said “I advise my clients to look for the positives and acknowledge their success, even if it’s small.
If your big win one month is that you didn’t impulse spend on one occasion when you wanted to, celebrate that!
Don’t say “yes but here are all the times I failed”. Success begets success, failure begets failure.
If you focus on what you’re doing right, it’ll be easier to do more of it. At the same time, set yourself up for success by making it easier to do what will move you toward your goal, and harder to do things that sabotage you.
Final Thoughts On How To Increase Your Financial Confidence As A Woman
Financial confidence comes with knowledge and time. The more we learn about money, what it can do for us, and how to make more of it, the more confident we’ll become.
If you’re a woman struggling with your financial confidence, know that it’ll come with time.
Use the methods I’ve listed above to help you increase your financial confidence. Don’t forget to celebrate your wins, no matter how small.
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