The Close Brothers Banking Group released their 2018 Financial Well-being Index and found that women are scoring significantly lower than men when it comes to financial health, with women at score of 48.1 and men at 58.3. These scores were determined using eight categories including budgeting and planning, savings and investments, money worries, debt, protection, tax, property and mortgages and retirement.
But what is financial well-being in the first place? There are numerous definitions available but in the most basic sense it means that you don’t have to worry about money.
It means you’re able to meet day-to-day expenses and financial obligations, including bills, taxes and rent. It means that you can eat out or enjoy travelling without worrying if you’ll miss out on credit card payments. It means you’re ready for financial emergencies like health problems or even losing your work. It means that your future is set and ready (or at least getting ready) for retirement.
Financial well-being is important for all, regardless of gender, but there are specific challenges that women encounter when it comes to financial well-being that their male counterparts often never have to. One of the biggest hurdles is the gender pay gap. It is harder for women to build wealth when they’re being paid less than their male counterparts. Gender bias is also in play when it comes to financial advise. Financial planner Marguerite Cheng shares in her article anecdotes of what her women clients have experienced with other financial advisors, from not taking their questions seriously, to not placing importance in their role in the household.
There is no better time to start working on your financial well-being than today. Here are some tips on how you can get started:
1. Know Where Your Money Goes
The first step towards financial wellness is knowing exactly where your money is going, down to the last cent. Make a habit of listing down your daily, weekly and monthly expenses, from your electric bills to your coffee runs. Understanding where your money goes will allow you to make plans for the future and perhaps make changes in your spending habits and make better financial decisions.
2. Make a Habit of Saving
Instead of saving money that’s ‘left over’ from all other expenses, make your savings part of your actual budget. Take a look at your list of expenses and see if there are any expenses you can cut back on and turn into savings instead.
3. Explore Making More Income
If after you’ve analyzed your spending, you discover that what you’re making just isn’t enough, there are two options. Either spend less, or increase your income. The second option isn’t as easy as it sounds, but it is doable. For professionals, you may want to look into the possibility of a pay raise or even seeking a position in a different company that would put more monetary value on your skillset. There are also numerous side jobs you can do after hours or even on the weekends, including freelancing or coaching to selling your baked goods online.
4. Seek Financial Advise
A professional financial advisor can help you make the most of your money, especially for your bigger expenses. Restructuring your loan payments or mortgages could mean more money going towards your savings or investments. When speaking to a financial advisor, don’t be afraid to voice out your concerns, ask more questions and to let them know where your priorities are.
The financial well-being of women and wealth building are part of Rise and Lead Summit 2019 agenda. This year’s Rise and Lead Summit is about building dynamic and inclusive economies, where everyone is given an equal opportunity to create wealth for themselves, their families, and the society they are part of. Register today to secure your seat here.
Ebere Akadiri is an accomplished entrepreneur and an advocate for women in leadership. Her passion to inspire others to achieve their goals drove her to found Rise and Lead Women along with her co-founder, Poonam Barua. Their mission is to inspire women to take the lead in closing the gender gap in workplaces and in business.