Unfortunately, society still has a long way to go when it comes to financial equality. In fact, women still earn 17.4% less than men. So, as a woman, it is important to make the most of your money. And to do this, you need to mast the basics of financial management. By building good financial habits now, they will last you a lifetime. Today Siragusa is going to discuss the best financial advice for women.
Financial Knowledge and the Gender Gap
There is still a big gender gap when it comes to financial knowledge. A report released from the Fawcett Society in 207 revealed that women are less likely to understand key financial concepts than men. And just 40% of women have a high level of financial literacy compared to 67% of men.
Unfortunately, most people still see finance as a man’s world. And many of us assume we aren’t smart or capable enough to handle our own money. Many of us simply didn’t grow up around financially clever female role models so we had to figure things out the hard way. Which, for many women, means ending up in serious debt before they start taking finances seriously.
But the good news is that all women can take their financial matters into their own hands. It simply means taking a new approach to managing your money and developing good financial habits.
Develop Good Financial Habits
Humans are creatures of habits, and these habits can make or break you. You don’t become what you think about consciously, but by what you do constantly. You need to first make your habits before they make you.
As a result, your financial behavior can either make or break you. So you need to start making good habits, today, to get a hold on your finances and start increasing your wealth.
Know What Money You Have and Make a Plan for It
The Siragusa team always recommends that women should make a plan for their money and stick to it. But you can’t manage your money and make a plan for your finances if you don’t know how much you have. So you need to consider:
- How much money do you have in your current account?
- Are you saving and investing? How much?
- How much money do you have coming in every month and how much of it do you save?
- Having a spending plan can help you see:
- Where your money is going
- Know how much money you have coming in every month
- Where you can cut back on your spending
- How much you can save each month
Save Before You Spend and Automate Your Savings
Our financial advice for women is not to save after paying for expenses. Instead, save or pay yourself, first, before paying for expenses. If you spend money first and save whatever is left, then you need a new tactic.
You need to draw up a realistic budget or spending plan for your money. From there you can work out how much you can afford to save each month and you can put it away as soon as you get paid. To do this, you can set up an automatic transfer from your current account to your savings account so you don’t have to think about it. This is one of the simplest ways to save money and build your wealth. Even if you start small, it is important just to start. Once you build momentum, it’s going to get easier.
Set Smart Financial Goals
You need to set financial goals that are specific, actionable, measurable, time-bound, and realistic. For there, you can create an action plan to reach your goals. Think about both your short-term and long-term needs and use them to create exciting financial goals for yourself! Are you looking to build up your emergency fund? Do you want to buy a property in two years? Maybe you want to build up your retirement fund. Siragusa recommends you review your goals regularly to stay on track.
Don’t Take on Unnecessary Debt
Part of our financial advice for women is that you should not be dependent on credit. There is a high cost to consumer credit and this not only impacts your financial well being but it strangles your ability to build wealth. While some debt – such as mortgages, HECS, HELP etc – are unavoidable, consumer deb is optional. And it’s a terrible idea. If you don’t have the money for a holiday or new outfit, then either save up or accept you can’t afford it right now. Do not buy anything on credit cards you can’t afford to pay off each month.
While we can’t see the future, you know there will always be an emergency. It is important that you also have an emergency fund to ensure you don’t put yourself into stress and debt. Try to have at least 3 months worth of salary saved in your emergency fund.
Focus on Growing Your Net Worth
It is important to grow your net worth, as net worth is the real measure of financial security. A positive net worth gives you the ability to create income. Saving money is the first step to increase your wealth. But to get real results, you need to work on building your assets. This means acquiring things that increase in value over time, including property and stocks.
In order to calculate your net worth, you need to subtract your total debts) for example, your mortgage, car loans, etc) from your total assets (like the value of your home). This is your net worth.
The best way to improve your financial situation is to accept that money management is a key skill everyone needs. Siragusa not only hosts professional accountants but financial advisors and business advisors. We are here to help you grow your wealth and better manage your money. Contact us today to find out more about our services!