As women, financial success is more important than ever. When you control your money, you have financial freedom and the ability to work towards the future you desire. Financial success enables you to have independence and helps you prepare for unexpected events.
5 reasons financial success is important
Here are five reasons why it is critical that women have a firm handle on their finances and why financial success is important.
1. Women are earning more money on average than ever before
Compared to previous generations, more women are in the workforce than ever before. Many of us are the heads of our households, or if we are in relationships, many of us earn significantly more than our better halves. We are out there earning money and doing things for ourselves. The more reason why we need to manage the money we work so hard for.
2. Women are still earning significantly less than their male counterparts
Despite more women earning more than ever before, we are paid significantly less for doing the same jobs as our male counterparts in nearly every single occupation and industry. On average, as women, we earn 20% less than men.
If we were to break it down even further by demographic, the numbers are even more discouraging. Black women earn 35% less and Hispanic women earn almost 50% less.
3. Women, live longer than men and take more time off from the workforce
We are living longer than men by an average of 6 to 8 years. This means we need more money for our financial success in retirement than men will.
Besides being paid less, many of us will take time away from the workforce and away from pursuing career paths temporarily or permanently to have and raise children, which reduces our lifetime earnings even further. Are you single? Here are our top money tips for single ladies!
4. Women are more emotional about finances than men are
According to a survey, women have more stress than men when it comes to being in debt. And this stress ties into worse sleep, weight gain and impacts our overall financial confidence, making it really clear that women are more uncomfortable having debt.
5. 90% of women at some point in their life will be solely responsible for their finances
Another major reason why financial success is more important than ever for women is the fact that a lot of women, despite being on top of things in another aspect of our lives, e.g., managing our household, taking care of our children, etc., many of us take a back seat when it comes to managing our finances.
However, getting the education and support we need to put ourselves in the drivers' seat when it comes to our finances is critical because, at some point in our lives, 90% of us will be solely responsible for our finances either from staying single, divorced or living longer.
Key steps to take for financial success
If you're not quite where you want to be financially take these key steps to get started towards success!
1. Get organized and budget
Getting your finances organized and planning out your spending, saving, and investing (aka budgeting) is one of the first steps to achieving financial success. You may not love it at first, but it's all about finding a budgeting method that fits you best. Practice makes perfect.
2. Create specific and measurable goals
The goals you create should be for the short term (the next year), mid-term (1 to 5 years), and for the long-term (5 years plus). It's not about trying to predict the future. Instead, look at it this way; Goal setting and long-term planning are a work in progress, and you can adjust things as your life situation changes.
But it's better to have clear goals in place for your life and finances than to have none at all. It will help you get clear on what you really want to accomplish with your finances and motivate you to acquire financial success.
3. Automate your finances
It's common knowledge that people who automate their finances are more likely to save more money than people who don't. One reason why? They don't get a chance to see the money before they save it, making them less likely to spend it. There's no chance for mental debates or self-negotiation.
You can automate everything from your bill payments to your savings and investments. If you are not comfortable with automating, start with one or two parts of your finances and see how you feel.
4. Start investing
When it comes to investing, you are basically putting your money to work for you, and investing is how you will ultimately build wealth, but you have to take advantage of the time you have now to realize growth.
Before you invest, however, (e.g., in your employer's retirement plan, in an IRA, in non-retirement accounts, in a business or real estate, etc.), it's important to do your research, set clear objectives, and understand your risk tolerance, so you have a general idea what to expect.
5. Check-in on your finances frequently
The same way you have annual doctors or dental visits to make sure everything with your health is in order and you keep yourself in good health in-between visits, e.g., eating well, brushing your teeth, etc, is the same way you want to think about checking in on your finances.
Put time on your schedule to check in on your finances from week to week, month to month, and year to year to ensure everything is in order with your financial plans.
You can become financially successful
As women, we owe it to our current and future selves to have a firm handle on our finances, and we are more than capable of attaining financial success despite any odds that might exist. Remember to start managing your money better by budgeting, creating goals, and regularly checking your finances.
These small actions lead to big results and will lead you on the path to success. You can get started with our completely free financial courses and worksheets. Let's do this, ladies!