Taking Control—Four Financial Management Tips for Women

In recent decades, women have taken on new roles and made considerable progress toward eliminating gender stereotypes and diminishing traditional norms and attitudes. Specifically, when it comes to financial management, women are far more likely now than in the past to control their own money and live independently.

However, the long-standing societal norms that limited women’s control over finances in the past continue to impact female financial engagement in the present. For example, a 2020 US Bank study found that female respondents were less likely to be exposed to financial literacy programs than men, with fewer women citing such programs at work or school as the primary source of their financial knowledge. Instead, women relied on their own initiative and curiosity, or advice from financial professionals, to learn. Further, the study found a higher percentage of women than men associate negative feelings, such as stress and anxiety, with financial planning. These feelings may cause women to take a back seat in managing and engaging with their finances.

How can women work to overcome these gaps in financial literacy and engagement? Heather Croke, CFP®, CPA, Boulay Wealth Management Partner, discusses some ways women can gain confidence and take control of their financial management.

Address Your Finances Head-On

We’ve all heard the saying, “ignorance is bliss.”  When it comes to your finances, the opposite is true. If you do not know exactly what is happening with your money, you won’t be able to make any positive changes. Unfortunately, without prior practice and focus, it may be intimidating and overwhelming to face your finances head-on.

Start by taking the time to really understand where your money is going. Evaluate your statements to determine which expenses are necessary, and which are more frivolous. Are there any expenses that can be reduced or eliminated? Tracking your expenses is the first step to creating a budget that fits your needs and aligns with the lifestyle you want to create. It also helps you find areas for improvement in your spending habits.

After you gain insight into your own financial standing, you can improve your overall financial literacy through self-education. There are many women-focused financial literacy tools and resources available, such as apps, podcasts, books, videos, online articles and more. You can also talk to and learn from people you know and trust. Remember to give yourself grace—financial topics can be complex, and literacy will not happen overnight. And, if you already have substantial financial knowledge, remember that there is always more you can learn.

Hold Yourself Accountable

Once your budget is set, it is important to hold yourself accountable. Check in on your budget after a month-long period. Did you spend more than you anticipated? Make any necessary adjustments to optimize your budget going forward.

Another way to keep yourself on track is to set measurable financial goals. What do you want to achieve in one year, five years from now, or in ten years? Getting comfortable setting and clearly articulating your financial goals, as well as the timeline in which you would like to achieve them, brings them much closer to fruition.

Focus on Investing (Not Just Saving)

Saving money is essential to achieving your financial goals, but savings alone do little to grow your wealth over time. Investing a portion of your savings not only helps you combat inflation, but also provides opportunities for your savings to continue to grow. Unfortunately, investing is currently less prevalent for women—only 48% of American women invest in the stock market, compared to 66% of men, according to NerdWallet.

If you are new to investing, here are several general guidelines that may help reduce your risks: