There are a number of areas in which women may struggle with self-confidence. One of them is control over their finances and investing in order to increase their wealth.
A recent survey has shown that only about one in four women feel confident about making investment decisions. Since they also earn around 35% less than men on average, this can often mean that they live from paycheck to paycheck, with little surplus that can be used for growing their wealth and for retirement.
Why Women Are Further Behind Than Men
Women don’t just earn less. They also often take gaps in their careers in order to raise children or fulfill other caregiving roles. Even though society tends to not value these activities, one insurance company has rated the value of a stay-at-home mom at $120,000 per year – the amount you would have to pay to hire others to maintain the home. The loving and caring aspect is of course something you can never put a price tag on. But it is a good indication of just how valuable stay-at-home moms really are.
A Lack of Confidence
Many women feel they have not learned enough about managing money and investing. They tend to avoid talking about money in general and feel nervous about discussing their finances with a stranger, even if they are a professional.
In part, this might have something to do with perceptions when they were growing up, which seem to indicate that men handle the money in a household. They also tend to focus more on the here and now, struggling to scrape by, rather than on retirement.
There are several ways to boost your confidence when it comes to money. Here are some suggestions.
1. Create a budget.
2. Always manage your own money, even if you are married.
3. Mark out paydays on a calendar, and when major bills fall due.
4. If you use a credit card, try to pay off the amount spent by the end of the month in order to avoid interest charges.
5. Do whatever you can to avoid late fees and other fees.
This is just wasted money that could be better used for investing or retirement.
6. Focus on earning more.
Itemize all the things you do in your job to make the company money, and/or save them money. Then ask for a raise. If they don’t give it to you, either look for a better paying job with more benefits, or consider other ways to earn more. These might include starting an online business, becoming a direct seller for Avon and other companies, taking a second job, and so on.
7. Concentrate on cutting back.
Review your budget. Chances are there are several places where you can cut back.
8. Create an emergency fund.
Open a no-fee bank account and try to save 3 to 6 months of the essentials in your budget, such as rent/mortgage, electricity, gas and so on, just in case the unexpected happens.
9. Be sure you have disability insurance.
You should have short- and long-term disability. Check the policy. You might be able to buy more coverage. In most cases, long-term will only cover 66% of your regular salary, which could cause you to struggle to make end meet.
10. Invest any surplus.
Consider investing any extra money you earn and whatever you manage to save. Mutual funds and 401Ks are good choices. If you have children, invest in a 529 account. Get another relative to open the account so any money saved won’t be factored in when it comes time to determine their financial aid packages.
11. Make the most of any 401K at your job.
If they have a match, be sure to invest the full amount. Remember, it is pre-tax dollars, so chances are you won’t notice that much coming out of your paycheck each month.
12. Take classes.
Learning more will help boost your financial confidence.
Follow these 12 tips to become more confident about money.