Why Women Need to Be Financially Confident

Education

Oct 15

Why Women Need to Be Financially Confident

Women are far less likely to feel confident talking about money as men—and they can suffer because of it. 

As much as we might hate to admit it, money makes the world go round. It determines how we live our lives, and is often a leading cause of stress for many couples. 

So why do women find it so hard to talk about?

A 2015 study from Fidelity Investments found that 80% of women refrain from discussing money matters with friends and colleagues, and only 47% of women feel confident talking about finances with a professional.

Another report from UBS Wealth Management found an even lower number, reporting that while 56% of men say they are financially confident, only 41% of women said the same. 

With those numbers it might not come as a surprise to find out that 92% of women say they want to learn more about financial planning!

Today we take a look at why women need to be financially confident in order to find true financial freedomand how they can get there.

What is financial confidence?

Also called financial literacy, financial confidence refers to the knowledge, skills and confidence a person needs in order to make informed, responsible financial decisions.

It can include simple saving and budgeting know-how all the way up to the ability to make complex investment decisions.

Why is it so important?

Unless you’re from an incredibly wealthy family and have every need provided for, you will need to make financial decisions at some point in your life.

Most of us enter the world of financial decision-making when we go to uni, taking out student loans and getting jobs to help pay for tuition and living costs. For those who decide uni isn’t the right path for them, those early encounters with the world of finance might include paying rent and bills and budgeting for monthly expenses.

As we progress through life, the decisions we make in regards to money only grow in impact: salaries, major purchases like cars and homes, and planning for the long-term with savings, investments and pensions. In order to make the best decisions for your future, you need to understand what all of these things mean for you practically.

For women in business, financial literacy is an absolutely essential component of success.

How to build your financial confidence.

1. Set your financial goals.

When it comes to finances, you need to be ready to play the long game. Paying off loans and building wealth takes time.

In order to keep you motivated, set yourself some financial goals. Start big by asking yourself what kind of life you want in 20 years, 10 years, five years, then figure out what steps you need to take now to get yourself there over time.

If looking that far ahead feels overwhelming, it’s okay to start small too. There’s lots of advice out there on how to divide your income to best suit your financial goals. A good rule of thumb is to pay yourself first by putting 30% of whatever income you earn into a savings account. 

2. Start saving.

The biggest part of building financial confidence is just to get started! If you don’t have a savings account, get one. If you do, make sure you have a plan for how best to grow it.

3. Think about the future.

What’s important to you right now might not be what’s important to you in 10 years, and sacrificing a little now for financial freedom in the long run can be a very worthy investment.

For women, it’s also important to think about the likelihood that you will choose to take a career break, such as going on maternity leave, and the impact it might have on your earning potential when you return. 

If you do decide to take a career break, make sure you know your rights, like the right to ask for flexible working hours when you return!

4. Find an advisor or mentor.

Whether you hire a professional or simply recruit a knowledgeable friend or family member, get help!

Find someone you trust who can help you create a plan for how to manage your finances and grow your wealth. Talk to them about what you want your money to do for you. They can help fill in the gaps in your financial education and make sure you are making smart decisions.

5. Negotiate.

Did you know that a 2018 study found that women ask for raises as often as men, but are less likely to get them?

It’s infuriating, but it only serves to highlight the importance of learning to negotiate when it comes to salary and promotions. And a key part of those negotiations comes down to confidence regarding finances. Know what your position is worth, and go into every negotiation knowing a) what you’re going to ask for, b) what you would be happy with, and c) what’s the lowest you would accept. (Hint: these should all be different numbers!)

Check out our guide on how to get what you want for more tips on negotiating, and remember—negotiation isn’t just an important skill for discussing salaries, but also for getting better rates on all kinds of services.

Don’t be afraid to ask for a better deal. The worst that can happen is that they say no!

6. Don’t be afraid to take risks.

“We have to get women to be willing to invest in markets and to fail,” says Hope Taitz, CEO of ELY Capital. 

“You’re going to make some bad investments, but if you have a diversified portfolio it should pay off in the long term.”

7. Keep learning.

Many men read financial magazines and listen to financial podcasts—so why don’t you?

Good ones to try include:

BONUS TIP: attend a seminar like T Harv Eker’s Millionaire Mind Intensive.

Attending a seminar focused on helping attendees develop financial literacy is a surefire way to kickstart your financial confidence. 

Contact our sales team on +44 203 141 7790 to find out about our upcoming events to see if one of them might be right for you!

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