Women are already financially literate – but how can they become financially confident?
There’s no prerequisite to being good at managing your finances. With an open mind, willingness to learn, an honest look at your financial situation, and some confidence in your own decision-making skills, anyone can gain the tools needed to handle and invest their money. In fact, women are already strong in this category, with 60% of them scoring well on financial literacy tests.
Considering these results, why is it that only 30% of women feel confident about their financial knowledge?
There’s no doubt that there’s a need to increase this number. Investing is a key component of any financial plan, especially considering the average woman will inherit a sum of money in her lifetime, and 90% of women will be the sole financial decision-maker at some point.
So as a woman, what can you do to become more secure in your financial literacy and take control of how you save and invest with more confidence?
Don’t be afraid to talk about your finances
Yes, it can feel a little awkward at first. And yes, there seems to be a hesitancy in talking about money with your loved ones, especially when it comes to investing. But on the path to becoming more comfortable in your own financial competency, you need to be open to discussion and asking questions.
You don’t have to get into the nitty-gritty of how your friend or family member manages their money; instead, ask them if they have an advisor they could recommend or a robo-advisor they’ve been using. Knowing what’s working for the people you trust can give you a great starting point in exploring what’s going to work for you.
Start early – with whatever you have
For millennial women especially, understanding the steps in building a strong financial foundation will give you the confidence to make more decisions when it comes to your money. While you have a long time-horizon to reach your goals, get started now.
Open an investment account (we break them down here) and save something – anything – each pay cheque. When you get a pay raise or start making income from a side-hustle, increase your contributions a little more. Become comfortable and proactive in saving money, and you’ll become comfortable and proactive in taking control of other aspects of your financial life, too.
Consider a goal-based approach
Men generally define their financial goals in terms of a percentage or dollar amount, but women find financial success in what the money they’ve saved can do for them and their family. For this reason, a goal-based approach to looking at your financial situation makes sense.
There’s a lot to consider when beginning to organize your financial goals, like making sure you’re prepared for any health-related events, and accounting for longer life expectancies. Think about your other financial goals. Do you want to help put your kids through post-secondary school? Or is there a big vacation you’d like to take in a few years?
Our goal-planning tool Invisor GPS helps you set your investment and insurance goals and track your progress towards them. If there’s a shortfall somewhere in your plan, the tool will point it out and you’ll be able to adjust as necessary.
Just take that first step
Maybe there are a couple aspects of your financial plan that you’re unsure of. Maybe you’re totally starting from scratch and want to make sure you’re on the right path. Whatever your situation, the most important thing you can do is just take the first step.
Ask the question. Do the research. Open an investment account that makes sense for you. You know what’s best for you, what you want to accomplish, and where you are in your financial journey – the confidence you need to take control of your finances has been there all along, you just have to set it in motion.