Regardless of the call for gender equality, women still face several gender-specific risks especially when it comes to work and money. Current economic models have failed to close the gap that exists between men and women. Domestic work remains stubbornly feminized. As a result, the gender gap in the workforce has remained stagnant over the past 20 years states the United Nations. Less than two-thirds of women are in the labor force compared to 93% of men.
For many primary earner households, the income is meant to support the family, and that’s great… until it’s not. For one thing, life events and financial hocks can wreck even the best-laid plans. Other disruptors could be divorce, employment, and widowhood. A stay-at-home mom may find herself suddenly single. Sometimes a working woman may abruptly stop working to be a primary caregiver for her sick spouse or ageing parents.
If this doesn’t bother you just yet, it should, and here is why. Of those employed women, about 58 percent are in the informal economy earning low wages and lacking social protection. Sadly, Women’s ability to earn and build up assets for their later life has been compromised. So how can women better manage their finances and plan for the what-ifs?
Interesting read: 7 Ways the Internet is Providing Remote Job Opportunities for Women
This article will explain 6 finance tips to help women save more money.
6 Finance tips for women
1# Have emergency reserves in place
Bankrate’s financial reports index shows 28 percent of Americans have no emergency savings.
Are there consequences for not having emergency savings? You guessed right. You stand a high risk of getting into debt if something unexpected happens.
Hence many finance experts advise your emergency fund should be able to cover six months of spending. If ever the primary source of income becomes unemployed, the household can overcome this period of uncertainty. They wouldn’t have to struggle to find other sources of income or consider drastic day-to-day spending cuts.
Beck at Mom beach suggests putting away 10 percent of your paycheck each month into your emergency savings account.
Your emergency funds should be separate for other savings. That way you can structure and organize your savings needs and goals in a way that’s difficult or impossible with a single account.
2# Buy Insurance
You can weave several dreams in life and develop investment blueprints to turn those dreams into reality. But here is the thing, unless you protect them with a safety net, they can become a liability. That safety net is insurance.
Make sure the primary earner has enough term insurance to support the family should something happen. Also, consider the insurance required to cover the at-home spouse who runs the home but doesn’t get paid. After all, these activities have their associated cost if outsourced.
3# Buy just what you need
You will often find our parents rejecting current consumerism. Back in the day, all markets were under scrutiny, and impulsive markets were rare. Today, everything is different. People clear their accounts for things they don’t need while making compromises on the necessary stuff.
To help you do this, Amanda at Rusty suggests having a budget. She says “a budget will tell you how much you can afford. So, instead of going to the store and feeling guilty about buying clothes, I know exactly how much is in my budget and available to spend.”
Also being different and not trying to keep up with the “crowd” is one of the best ways to save money. It’s easy to get sucked in trends. “Before even knowing the budget, I could always save money simply without having to worry about buying the latest fashions or brand,” says Martina at Stack your dollars.
Try to be a better version of yourself, and not try to impress people. It will be easier to live within your means and save more money.
4# Work with your spouse
Most women don’t want to get bored with the financial details for many reasons. Taylor and Megan Kovar, The Money Couple identified one of those reasons to be disinterest in finances.
But then, when it comes to managing your finances, you must do it TOGETHER with your spouse.
In some homes, there may be a division of labor. A spouse can be accountable for day-to-day activities like paying bills, balancing the chequebook, and managing schedules. The other spouse may take the responsibility of overseeing investment and retirement accounts and household assets.
Yes, both spouses need to understand the financial situation of the household. And get involved in the conversation- what are household debts? What are the savings and investments intended to help achieve future goals? How is the family monitored to achieve these goals?
Jon at Compounding Pennies says, “nothing destroys a relationship faster than money, and nothing can build your wealth faster than having a partner who is committed and excited to take your lives to the next level.” So get involved. Sit down with your spouse and build your dream life together. What does it look like? What type of lifestyle is it? How much money do you need to afford it?
5# Learn how an investment works
Go back a few decades, the stock market was considered too risky, and women would rather have their money accumulated in a bank. It’s a different story now. New moms don’t find the minimal interest from the banks attractive. While keeping some cash in a bank account, they are always looking to get higher returns. The focus has shifted from protecting savings to growing them.
“Putting together a sound investment strategy can make your investment efforts much more effective. But it doesn’t end there. Effective investing requires an ongoing effort.”
-Ed at Mountain Financial Capital
You can learn to save and invest, or even better, implement it. Open your savings and investment accounts to understand how it works and gain experience. There are several great books, podcasts, and resources to help you improve your financial IQ. While the investment approach and tools have changed over the years, the importance of a woman’s participation in the family finances hasn’t.
6# Improve your earning potential
Sometimes a woman may have to leave the workforce even at their peak earning years. This could be for many reasons- to look after a sick spouse, family, or an ageing parent. Whatever the reason, this career gap most times makes it somewhat difficult and even scary to reenter the workforce.
It is advisable to keep a foot in the door. Taking on part-time, contracts, or consulting work will keep your skills sharp. Today, remote work is a thing. So while you may not be a full-timer, you can still earn on the side to support the household.
Considering volunteering. Volunteering can help you advance your professional skills, make friends, learn new skills, and even feel happier and healthier.
If you find yourself in a situation where you have sole financial responsibility, you will have the confidence to make the most of potential opportunities.