Women need to trust their instincts when it comes to money and not rely on men – fathers, husbands, brothers or boyfriends – to run their finances. Let’s talk about how to do that.
Ample evidence exists that women are better with day-to-day money management. Many of us have seen our mothers, grandmothers and aunts feeding and clothing their families on very little cash.
Often, however, women fail to look beyond making ends meet. Across the world, women don’t pay enough attention to empowering themselves financially, and tend to leave financial decisions to their male partners. One of the biggest consequences of this, is that thousands of women end up trapped in relationships and marriages because they cannot fend for themselves and their children.
Reema bint Bandar Al Saud, Saudi Arabia’s first woman ambassador to the United States and a successful businesswoman, once said: “I truly believe that liberty for a woman comes from the ability to make financial decisions for her life.”
In the spirit of these words, we look at what you can do to become a truly liberated woman.
- Stop thinking that a man is your financial plan and telling yourself that your man will take care of your finances. Not only is it a myth that men have an innate ability to work with money, but they are unlikely to be around forever to manage the money. Statistics show that 75% of women in a male-female relationship will be widowed by the average age of 56, and that 90% of women will be solely responsible for their finances at some point in their life.
- Draw up and stick to a personal budget. You need a clear picture of all the money flowing into and out of your household. By keeping track of your expenses, you will identify savings opportunities, and be in a position to spend your money on things that are really important to you. A budget is the difference between never having enough money and achieving your financial goals.
- Secure yourself against unforeseen emergencies. A good place to start is by building up an emergency fund. Too many women stay in unhealthy relationships or terrible jobs because they don’t have money to break free. And even if you are happy at home and at work, emergencies happen. When they do, it is far better to use your emergency fund than getting into debt.
- If you are struggling with debt, get help. It might be as simple as relooking your budget and being more disciplined with payments, or as comprehensive as debt consolidation.
- Have the money talk with your husband or partner as soon as possible (the best is to have the conversation before you get married or move in together) so that you both know how money will be managed in your relationship. In this discussion, make it clear that you will be building your own wealth, in addition to what the two of you are doing together.
- Set short- and long-term financial goals for yourself. Whether it’s building an emergency fund, paying off debt, saving for a home or investing for retirement, having specific goals will give you direction and motivation.
- Understand how to get to a healthy credit score (and keep it healthy), so that you can get credit to buy an asset or in case of an emergency that your savings cannot cover.
- Keep educating yourself about money and investments – but remember that you don’t need to know everything before you can start saving and investing. In fact, you will never have all the answers. Getting started is the most important step.
- Teach your daughters about money and how to manage it. This will give them the confidence to be their own financial hero.
Financial wellness and independence depend less on how much money you have than on what you do with that money in the short term and the longer term. Financially independent women are essential for the financial wellness and overall wellbeing of households, societies and the global population. Now is the time for you to become one too.