Financial advice for women may still be an overlooked topic. But as we struggle to make sense of the gender pay gap, it’s essential to consider the ramifications of higher wages. Meanwhile, it doesn’t matter how much money you make. Female empowerment involves managing cash flow like a pro.
Unfortunately, you can get advice about finances from anywhere. And most people aren’t shy to share their opinions on your spending habits. However, you’re the best person to make lasting financial decisions. So, determine the obstacles and learn how to build generational wealth on your terms.
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Helpful financial advice for women meets the unique challenges that modern females must confront. But according to research from Prudential, ladies are up against eight distinct barriers.
A Pew Research analysis revealed the shocking truth about wages in America. As of 2020, the average woman made approximately 84% of what a man earned to do the same job. That means she’s less prepared for retirement because her income can’t compete. But as women continue to enforce workplace equality, the gender pay gap is slowly shrinking.
Women often take a different route to meet financial goals due to life events such as pregnancy or marriage. And while she can manage a work/life balance, her prospects may change or disappear in place of other responsibilities. Thus, being a caretaker can hinder a woman’s ability to earn a competitive income or save money.
DID YOU KNOW: Mothers are more likely to take time off work for family matters than fathers.
The U.S. Department of Labor reports that most women retire before men. However, many retired women failed to save for their golden years. And that means about 65% of the elderly retired population ends up in poverty. So, women who neglect their nest eggs are more likely to suffer financial hardships even if they have great jobs.
Women are expected to live longer than men. On average, gals outlive guys by about two decades. Thus, females must endure retirement for more time after age 65. And if they don’t have enough money in the bank to support their lifestyles, their final days will be stressful.
Gender plays a significant role in the cost of healthcare and insurance. For example, women generally pay less for auto coverage than men because they’re less accident-prone. However, women usually pay more for health insurance because they report more problems. On average, ladies spend around $3,500 a year on healthcare. But men spend less than $2,000 on medical bills annually.
DID YOU KNOW: Approximately 27% of mothers report difficulties paying for medical bills.
You won’t find as many women making risky financial moves. That’s because females are typically more cautious about money, and most prefer stability instead of ambition. Of course, there’s always an exception to the rule. But in general, ladies don’t invest as much into volatile stocks. So, their margins grow more slowly.
If you live by yourself or don’t have a partner, saving for retirement is even more challenging. Making ends meet while also putting money back for later can be impossible without help. And women with children or other responsibilities must prioritize differently. Often, their financial future is the last thing on their minds.
The average woman may be confident in herself, but various factors might make her uncertain about finances. Meanwhile, a lack of confidence can make her miss lucrative opportunities and investments. Plus, she might not know where to turn for answers. Regardless of the progress, ambitious women are still considered taboo in many workplaces.
These eight barriers demonstrate how women struggle to generate long-lasting wealth. However, none of the obstacles are set in stone. Females can function at high levels despite life’s challenges. So, they deserve to be compensated for that. And they need sound financial advice for women to help them build a better future.
Savvy women understand the importance of efficient financial planning. So, here’s your first piece of advice. Begin preparing for your future by making sound investments today. Don’t wait until you have extra money because that day may never come. Instead, examine your lifestyle to create a budget that supports your long-term goals. Then build generational wealth using proven financial advice for women.
Determine where you stand first. Calculate the amount of cash you bring in each month, then subtract how much you spend. Afterward, you can choose the best budgeting technique and track your progress along the way. Meanwhile, try to follow the 50/30/20 rule. That means you spend 50% of your income on needs, 30% on wants, and 20% on savings or debt.
Always calculate budgets using your after-tax earnings. But remember to add back the cost of life insurance, 401(k) deposits, and savings accounts. That’s still your money in there, and you earned it fair and square. So, it counts towards your net worth. Next, record your income and spending habits to monitor accounts and adjust as needed.
Making a budget and sticking to it is terrific. But none of that matters if you don’t spend wisely or invest in the right things. For instance, say you make good money at work but frequently shop until you drop. You’re essentially investing in your vanity instead of in your retirement. So, break the budget into digestible chunks with plenty of room for what you love.
Here is a guideline to help:
- 50% – Reserve this much of your income for living expenses and everyday costs.
- 30% – Use this cash to pay for planned expenses such as home improvement and vacation.
- 15% – This is how much you should put back for wealth building and retirement.
- 5% – Leave this amount in the bank for unexpected expenses and emergencies.
The average annual income for women in the United States is about $50,000. So, let’s use that as an example. Assume you spend 50% of your earnings on everyday expenses. That leaves you with around $25,000 a year for other things. But if you spend more than 30% on shopping, gifts, and incidentals, the extra cash won’t make it to your savings account. Impulse purchases will only buy you temporary happiness. Think of the future to avoid financial hardships.
Wealthy women are everywhere, although they account for only 14% of the Forbes 400. But ask any of them, and they’ll likely say that practical financial advice for women is what helped them succeed. Most successful females also carve an efficient path to cut loss and maximize their growth potential.
Establishing goals and saving for retirement is paramount. Yet, protecting your future is a challenge when the starting point is unclear. So, follow these five simple steps to make your wealth last:
Every day counts. And you don’t have any time to lose regardless of your gender. That’s because retirement requires hefty savings account for daily expenses, medical bills, and traveling. But if you start saving money too late, you might not have enough cash in your golden years.
Banks typically offer retirement accounts to existing members. Plus, some employers match your 401(k) up to a certain amount. However, the average annual return on a standard retirement account is only about 5%. Thus, you can’t live comfortably on such tiny figures and must supplement the budget with regular bank deposits.
Even healthy people should consider buying disability insurance. The coverage protects you in case of an injury, accident, or medical emergency. Most people dump their savings when health insurance providers don’t pay expensive medical bills. But coverage for disabilities can help manage unexpected healthcare costs without ruining your retirement.
Disability policies are generally inexpensive and available through countless companies. You can even tack them to existing coverage or bundle services to save money. Either way, this step helps you protect your assets and investments when something goes wrong. And since life is unpredictable, you can never be too sure. But extra protection means you don’t always have to stress about it.
Becoming a wealthy woman isn’t easy, and it takes a lot of hard work. So, create several streams of income to fortify your budget. When it comes to money, the more, the merrier. And some side hustles don’t require much effort. You can make money from home these days while still working your day job. Therefore, this is by far the most efficient financial advice for women.
The best side gigs usually pay handsomely and on time. They’re also legal, legitimate, and long-lasting. So, here are some ideas to get you started:
- Community Services
- Homemade Products
- Tutoring or Mentoring
- Online Sales
- Affiliate Marketing
- Content Creation
- Book Writing (Royalties)
- Virtual Courses
- Digital Goods
- Rental Assets
- Crowdfunded Real Estate
Multiple income streams help safeguard your budget and secure your retirement. They prevent you from suffering financial ruin because of unexpected life events.
Debts can eat away at your savings, which stops you from living your best life. Meanwhile, things happen that can shrink your savings account and threaten your financial future. Each time you have an expected expense or borrow money from the bank, you put yourself further from the goal. So, get out of debt as quickly as possible to avoid headaches.
Start by paying off the most negligible obligations. Your small debts can cost more than you expect when you add them up. For example, five bills at $50 each equal $250 in recurring monthly expenditures. But pay off loans and stop using credit cards to enjoy a significant credit boost. Plus, you’ll see more money in savings over time.
Get ongoing financial advice for women to build generational wealth and protect investments. Ask a financial advisor to share budgeting tips and teach you tricks to save more money. You can adjust the trajectory to suit your goals or create new objectives. Together, you and your advisor will create a plan for the long term and adapt as you go.
Personal money tips are essential to building generational wealth, preparing for retirement, and stressing less each day. Plus, you might not know how to manage certain accounts without expert insights. If you’re going to save cash and find multiple income streams, be sure you’re extra savvy. An accounting pro can help you sort the options and decide on the best investments.
Investments, retirement, and 401(k) accounts offer complex protection and adequate provisions. However, they’re not enough to keep your head above water. Responsible fiscal behavior is also a must. Now, always remember this crucial financial advice for women (and men):
- It’s not about what you make. It’s about what you spend.
- Track every incoming and outgoing cent.
- Keep your finances organized with excellent record-keeping.
- Your budget must be realistic, or you won’t follow it.
- Pay your bills early or on time each month.
- Try to make more than the minimum payment.
- Check your credit score often, and remove any mistakes you find.
- Save the cash for big purchases instead of using your credit cards.
- Develop an investment plan and portfolio as soon as possible.
- Look for relevant financial advice for women.
Financial advice for women can help create security today and in the future. Rule number one: don’t skimp on your savings and protect your assets with comprehensive insurance. Savvy women understand how quickly the economy can change. So, they fortify their retirement plan with intelligent spending habits, wise investments, and residual income.
Learning how to manage money better is crucial. But it shouldn’t cause you distress. Make the most of your cash flow with proven tips and tricks. Then, track your progress and adjust the standards to meet deadlines and goals. And if all else fails, hire a financial advisor to help with the details.
About the Author
Sibongile Ngako is a Harvard-educated corporate fintech and compliance executive leveraging her expertise and background to help empower women professionally, personally, and financially.