Financial Independence For Women: A Step By Step Guide

Financial independence for women

Financial independence is a term with many meanings, and it can seem pretty intimidating at first. For men, this concept has been stressed by society for a long time, with a lot of importance placed on their careers and how much money they make. At the same time, unfortunately, financial independence for women took a backseat.

This should never have been the case, and it definitely isn't anymore. Financial independence for women is not only a smart idea; it's essential.

Financial independence has some defining characteristics no matter what, but there are some specific things for women to consider. And knowing how to handle money with confidence and make your finances work for you has never been more critical.

Let's define what financial independence is, why women should be financially independent, and how to begin. Plus we have some financially independent woman quotes to inspire you too!

What is financial independence for women?

You might be confused about this term, as there are about a million different definitions of what this means on the internet. And it can actually vary somewhat depending on your priorities.

But basically, financial independence for women is women being able to support themselves financially and accomplish their money goals. Some may see it as not needing to work anymore due to investments.

Still, at its core, it's about being able to do what you want in life because of savings and preparation. For some, this will be early retirement; for others, it's the ability to go where you want, live where you want, and pay for things you need.

Why women should be financially independent

Whether you're single, married, or in a relationship, knowing how to handle money is vital. Women should be financially independent because relationships should be equal, and if you're single, your money choices are your decision completely.

Even if you manage your finances jointly with a spouse, it's crucial to be educated about money and know how to stand on your own financially.

Money is a massive part of your life and your overall happiness. And that said, women, need to prioritize their finances now more than ever. Here are some specific reasons why financial independence for women matters:

Bills and expenses can be paid without worry

Being financially fit will allow you to pay for all of your expenses independently, without needing to borrow from anyone else or worry about paying bills. This creates a sense of peace and freedom because you know that you can take care of yourself.

Even if you share expenses with a spouse, it's important to contribute and learn how to manage money and expenses, just like you would with anything else in your life.

You can support yourself and help others

It's essential to be able to support the life you want to live. That includes paying bills, saving for long-term goals, and preparing for the future.

Not just that, but being financially independent helps you take care of your own needs and also helps others. You can give gifts to friends and family, pay for expenses for someone in need, give to charities, etc.

Living your desirable lifestyle becomes a reality

Everyone has a unique idea of the perfect life. What it means to live a desirable lifestyle is to live in a location and home that you like, have money for your future and be able to pay for the things you need and want.

For some, this might mean living in an apartment in Manhattan and saving 10% of their income for retirement. For others, it could be a tiny house in Montana, traveling often and saving half their money.

Your ideal lifestyle must be determined by you, but having the money to support it changes everything.

How to achieve financial independence for women

How do you begin this journey to stability and independence with money? Here are some tips:

Financial Independence For Women

1. Adjust your mindset

Before you begin anything, get clear about what financial independence means for you and how it will change your life. If you have unhelpful attitudes about money, like a scarcity mindset, now is the time to change that.

And remember, as you continue to improve your finances, your mindset will shift for the better more and more. Wake up each day and remind yourself of what you want to believe about money.

You can practice positive affirmations to help shift your mindset. For instance, using phrases such as "I can make as much money as I want" and "I'm great at managing money" are good places to start.

2. Improve financial literacy

Financial independence for women starts with financial literacy. Find out all you can about money terms, investing, saving, and anything that feels foreign with finances. You can do this in many ways, like through podcasts, reading, or blogs.

Try to find answers to anything you're unsure about, and don't worry if you need to ask for advice or help from advisors or trusted friends. Getting answers and improving literacy is the most important thing.

There's no shame in asking questions about what you don't know to improve.

3. Make a budget system

Making a budget one time is one thing, but a budget system is another. It's not a budget you occasionally do but a consistent and refined process that works for you.

Here is an easy way to make a budget system:

Budget consistently

Choose one day of the week, like Friday, to do your budgeting. That way, it becomes routine. Or budget on the last day of the month, or whatever aligns best with your paycheck and schedule.

Track your progress daily

You don't need to make a budget every day, but do check up on it. Make sure you're staying within your spending limits, and that the goals you've set are being accomplished.

A quick look at your bank account and the budget system should suffice; you can do this in as little as 5 minutes!

Use sinking funds

Sinking funds are places to store savings and allow them to grow larger over time. You save a certain amount per week or per month and put the money in your sinking fund until you reach your goal.

Good things to have sinking funds for are new cars, an expensive piece of furniture like a couch, or a vacation.

Use an app or strategy to help you budget

There are a lot of apps that help you budget if you prefer to keep your financial goals with you all the time. If you don't use an app, have another system in place that works for you, like a budgeting template.

Adjust budgeting goals as necessary

You might start out with some budgeting and savings goals that you think will be great, only to discover down the road that things have changed. It's fine to adjust your goals and change course when you need to; just be proactive about it.

4. Identify your goals

To know if you're making progress or not, you've got to have some goals with money. Set up short-term (a year or less), mid-term (5-10 years), and long-term (10+ years) goals.

Some short-term goals are buying a new car or creating an emergency fund. A mid-term goal would be a home remodel or a significant investment. And a long-term goal may be retirement money.

Working towards these goals on your own will give you a sense of accomplishment and confidence. The more you achieve financially, the better you'll feel about your ability to handle money well.

5. Improve your credit score

One of the significant steps towards financial independence for women is an improved credit score. If you haven't taken the time to build up your score, or you're unsure about how to do so, here are some suggestions:

Check your credit score

It's pretty much impossible to improve your credit without knowing your score, so take the time to find out what it is. You can check your score on sites such as Credit Karma or with a free Annual Credit Report.

Both of these sites will give you good information, but your free annual credit report is a bit more accurate, because it gives a report from all three agencies, while Credit Karma only uses two.

Make payments on time

If you don't make payments on time, it's going to affect your credit. Do everything you can to maintain a good score by always paying expenses when they're due.

Make sure your credit utilization ratio is low

To keep a good credit score, it's important not to have a lot of debt (or any at all, if possible). Keeping your utilization ratio lower than 30% is ideal. Credit utilization is how much you owe versus how much your credit limit is.

For instance, if your credit limit is $1,000, a 30% utilization would be $300. Be sure to use credit cards wisely to keep your credit score high!

Educate yourself further about improving your credit score

Learning how credit works can really help you improve your credit score. Knowing what a good credit score is and what you can do to improve it is essential. Also, if your score drops find out why and take steps to start improving it immediately.

6. Create a debt repayment plan

Got debt? That's okay! But it's time to find a way to pay it off, once and for all, so it doesn't hold you back from your dreams of being a financially independent woman. The first thing to do is calculate how much debt you actually have.

Then, depending on the amount, you can create monthly payoff goals and/or yearly ones if that applies. Even if it seems like a lot and you feel stressed, remember that every little bit of repayment helps, and you'll soon find yourself on the other side.

The section about short and medium goals should help with debt repayment. And remember that there are multiple options, including the debt snowball method and debt consolidation.

7. Make savings a priority

Your savings includes emergency funds and sinking funds for long-term savings goals. Why do savings matter? Simple. It helps you in emergencies and allows you to say yes to opportunities.

For example, your emergency fund will save you if you have to get a home repair done. Or, if you find an investment opportunity, the sinking fund you've saved for investing will allow you to quickly begin earning interest. Your savings matter so much; don't wait to begin!

Financial independence for women really can't be accomplished without savings.

Not only does saving up money teach so many things like patience and good organization skills with finance, but it also can give you chances to do things you might otherwise not be able to do.

8. Invest your money

Once you've come up with a budgeting system and started saving, the next step is investing. If you don't know much about investing, it's time to get educated and make some decisions because investing for a high return depends mainly on time.

The basics of investing are buying into a stock, bond, or some other investment vehicle. Then you earn interest on your money over time, though the market can vary.

You can choose investments that matter to you, such as certain companies or real estate. But it's best to have your assets in many different places, such as with a mutual fund or ETF. If your portfolio isn't well-diversified, look into that and change some things.

We've got lots of investing ideas to help you out. Even if you don't have much cash saved up to invest, you can still get started!

9. Negotiate your salary

Your salary is a large part of your income, even if you have a side hustle. Because of that, it's crucial when you start a new job to negotiate your salary. Don't leave money or great benefits on the table.

When negotiating, remember a few key things:

  • First, know if a salary is enough to support you or not.
  • Research the typical rate for the job you're about to start and make sure what you're offered lines up with this.
  • It's okay to pause for a minute when negotiating - silence may help the employer to consider a higher price.
  • Be respectful, but ask for what you believe is fair.
  • Try to put yourself in a position to walk away from the offer if it isn't right for you - have some other job offers or a current job.

Salary increments (pay raises) are another thing to consider when negotiating.

10. Ask for a pay raise

Asking for a pay raise can be intimidating if you've never done it before. But remember that you are a valuable part of the team, and you're good at your job!

Highlight the projects you've been part of that have gone well, and show the value of your work when asking for a higher salary.

Your employer is likely expecting to give you a pay raise at some point, so this shouldn't be too surprising to them. But remember to be understanding if a raise isn't possible at the moment.

However, if things stay that way for too long, you should consider looking for a new job with better pay. For more tips about asking for a pay increase, read our article about getting paid what you deserve.

11. Share your knowledge

When you've learned about money and become financially independent (or are on your way there), it's important to share what you've learned with others. That doesn't mean giving unsolicited advice, but do be willing to guide others with finance tips if asked, and offer your two cents when you can do so politely.

Especially if someone close to you is really struggling financially, try to help out by introducing new money ideas and helping out financially in some cases. Only if you're able, and it seems like a good idea.

Share your financial story with others, and encourage financial independence for women! Especially if someone you know is right where you were before you learned about money, it's important to tell them there's a better way than struggling with finances.

4 Benefits of financial independence for women

Women should be financially independent for many reasons. There are some fantastic benefits to being in control of your money! Here are 4 big benefits:

1. Financial independence increases confidence

Knowing that you've got your money figured out can boost confidence. You'll feel responsible and mature because you handle important matters well, and you feel good about your future. So your confidence is likely to increase!

2. Security improves with financial independence

In addition to feeling great about yourself, you'll also increase your financial security. Security in this sense means being able to pay for emergencies, knowing that your expenses aren't going to be a problem, and having the ability and knowledge to save and invest appropriately.

All of this can cause you to feel more secure.

3. Financial independence gives you the means to accomplish goals

Guess what handling your money right helps you to do? Accomplish all those amazing goals you've been thinking about!

With money, you can finally go back to school, take some incredible trips, get that retirement nest egg started, and more. Money, plain and simple, gives you the resources to do the important things you want.

4. Live life on your terms

Financial independence for women means living life the way you want. Because you're able to pay for the things you want and need, you can live life on your terms.

This doesn't mean buying everything you want but instead having the chance to make great decisions about what you'll do with your money. You can make the choices that impact you in the best way and help you live a life you enjoy.

Financially independent woman quotes

Now, with all of that said, here are some great financially independent woman quotes to inspire you! 

"Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver." - Ayn Rand

You are totally in control of your finances, and your money doesn't make your decisions for you. You have to manage it to align with what you want.

"For women, financial independence is a matter of necessity." - Carrie Schwab-Pomerantz

One of the financially independent women quotes that gets straight to the point and tells you what matters most.

"Being rich is having money; being wealthy is having time." - Margaret Wander Bonanno

The difference between making a lot of money and being wealthy is huge and cannot be overstated. Financial independence for women starts with understanding this.

"I truly believe that liberty for a woman comes from the ability to make financial decisions for her life." - Princess Reema bint Bandar bin Sultan bin Abdulaziz Al Saud

When you have money, you have the freedom to make the choices you want to make for yourself and your future.

"The choice to be excellent begins with aligning your thoughts and words with the intention to require more from yourself." - Oprah Winfrey

Financially independent woman quotes also deal with attitude and perspective. Choosing to excel is a matter of deciding and then doing, and this applies to finance and other areas of life.

Financial independence for women is necessary and achievable with a solid plan

Financial independence for women cannot be overstated. Even if you currently live paycheck-to-paycheck, you are capable of financial independence.

It does require some hard work and creating a solid plan to help you get there. But once you decide what you want, and you know how important it is, you'll be able to truly go after it with your whole heart.

Choose to pursue financial independence through educating yourself, managing your money, and meeting your unique goals. You can do it!

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