6 Ways to boost financial empowerment for women

It’s no secret that women manage money differently than men. Women tend to be more cautious with their finances and are afraid of making big mistakes. The desire for security over power often leads to women deferring or handing off financial matters to their spouse or advisor.

On average, women earn 73 cents for every dollar that men earn. In addition to the wage gap, women are more likely to lack confidence with their investments, feel less comfortable investing in stocks, and less likely to contribute to an RRSP. This can put women behind their male counterparts. When you consider that women are more likely to outlive men, and that society still pressures them to give up career and earnings to be caregivers, it seems clear that there is some way to go when it comes to women and money and opportunities.

There are some simple ways for women to gain more confidence with their finances and increase their financial empowerment. Here are six ways to do it:

1. Brush up on your finances

Start by making a commitment to upping your financial IQ. Classic personal finance books, such as David Chilton’s, The Wealthy Barber Returns, and Smart Women Finish Rich, by David Bach, can help you understand the basics of managing your money and get you on the path to financial independence. Knowledge is power, and this is especially true of financial empowerment for women.

2. Maintain your independence

Keep an account in your own name after you get married or if you are living in a common-law relationship. Even if you have a joint account set-up and comingle your finances, it is still wise to maintain your independence in some form. Enjoy the peace of mind knowing that you have your own funds to rely on if the unexpected should happen.

3. Establish credit in your own name

Along the same lines, make sure you apply for and keep credit in your own name. Don’t settle for being a co-signer or an additional cardholder. A stay-at-home spouse should at the very least have a credit card in her name as well as a recurring bill such as a cell phone plan. You need your own credit history if you ever want to get a loan or mortgage on your own. The ability to have your own access to liquidity and resources is a big part of financial empowerment for women.

4. Get on a budget

Make a budget and stick to it. You don’t need great math skills to know that spending more than you earn is a recipe for disaster and can lead to financial ruin. Start by tracking your expenses for three months to establish a spending pattern. Understand what comes in and goes out every month to get a true handle on your finances. This is crucial for anyone to know – no matter their gender. When it comes to women and money, it’s especially important to know what’s happening with the finances.

5. Pay yourself first

This is lesson number one when it comes to establishing your financial security and independence. Set-up an automatic withdrawal plan tied to the direct deposit of your paycheque. If you don’t think you can manage saving 10% of your gross earnings, start with less and increase it periodically. Push yourself with a stretch savings goal. You can always decrease the amount if necessary. In most cases, though, you’ll barely notice the difference because the money is whisked away into savings before you get a chance to spend it.

6. Get to know your employer benefits

Nearly half of all female employees never adjust their workplace contribution plans, meaning that even as their salaries increase they don’t increase their savings rate. This is a problem. Get to know your employer sponsored benefits and make sure you’re taking advantage of freebies such as employer matching savings programs.

Don’t leave free money on the table simply because you haven’t taken the time to read through your benefits package and make the necessary adjustments. Talk to the Human Resources department, take a seminar, and ask other senior employees about all the available benefits.

Women are perfectly capable of running their own financial lives and being successful. Sometimes all it takes is a money education for women to move forward.