Some women lack confidence when it comes to finances and this can mean that they do not feel able to successfully plan for the future or they may rely on others for financial guidance.
The gender pay gap and financial penalties for taking maternity leave can undermine women’s financial independence. On average men earn 9.6% more than women1. Women are also more likely to work part time or sacrifice their career to care for children or elderly relatives.
Below are some ways that women can take back control of their finances.
Understanding your finances is an important way for women to feel more financially confident. Having basic financial literary knowledge such as budgeting and managing debt is the first step to gaining financial confidence.
Knowing how to create a budget based on your income and spending habits will enable you to determine how much you can save each month to achieve the financial goals you set yourself.
Basic financial knowledge should also include understanding different types of insurance to protect yourself from risk such as critical illness cover.
Create a financial plan
Setting yourself financial goals for the future is important to keep yourself on track and accountable. Goals must also be realistic and you should be able to reach them without making drastic changes to your lifestyle. Setting a deadline for your plans will also help you to stay on track.
Talk about your finances
To gain more financial confidence, recognising your current relationship with money is important. Being open and honest about finances and starting conversations is a good way to break the stigma around money.
Women could talk to a friend, family member, colleague or financial adviser.
Talking about money issues and asking for advice, whether professional or personal advice will be beneficial. It may be useful to find someone with a similar financial background so you can learn something applicable to your own circumstances. For example, if you share your salary with another female in a similar role in a different company you may find that you are underpaid. This knowledge will help you to negotiate a better payrise from your employer.
Find a Financial Adviser
Talking to a financial adviser can be beneficial, particularly if you are still not comfortable discussing personal finances with a friend or family member. A financial adviser can answer any questions you have and can help you to set financial goals. They will then help you to create a financial plan to achieve these goals by recommending investments that are suitable for your own circumstances.
Research has found that taking financial advice has improved women’s financial literacy and empowered them to make informed decisions2.
People who had taken financial advice were on average £47,706 better off than those who had not taken advice.
Book a no-obligation financial review meeting today to find out if you could benefit from taking financial advice.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
1 Gov, UK, ‘Median hourly pay gap by sector’, April 2019