Although women have made some strides in finances, they still lag behind their male counterparts when it comes to personal finance. This demonstrates a less tendency among women to invest and grow personal wealth. The imbalance is mainly due to pervasive and persistent pay inequity, which means that they earn less than their male counterparts for the same work, and some are lost to uncompensated caregiving roles. Interestingly there are ways women can overcome these obstacles and take control of their finances.
Creating a plan
Mapping out your financial position and personal goals to work towards can help one manage their finances. Consider your financial habits and create a budget to stick to. Plan monthly expenses and monitor expenses to see if you have spent more for a given month than what you had planned. If there are excesses at the end of the month, you should make adjustments to stay within budget.
Invest rather than saving
You should not consider saving only, and the best way to grow your money is to invest it to generate returns. You should be an active investor. Start by setting aside part of your income for investment and saving. Women can take advantage of the low rate environment to put money in riskier investment.
Build an emergency fund
Having an emergency fund is important for a healthy financial plan. It is used for protecting finances against unexpected circumstances such as medical emergencies or job loss. You can build an emergency fund of up to five months’ income before considering an investment, whereby almost half of your net worth will be invested in income-generating assets such as binds, stock, and property.
Women should be confident about taking control of their finances. According to a study, women allocate more of their finances in saving but invest less in riskier assets that have potentially greater returns. This is because they are less confident, and thus with better understanding and education on savings and investments, they can be confident in managing their finances.