Financial Literacy is the Game-Changer for Women
Updated: Mar 7, 2022
Women are awesome! But one thing we generally are not so awesome at is money, unfortunately. We are three times more likely than men to say we are not able to save for retirement for example. We are more stressed out about money. We tend to earn less, save less and live longer.
All these money troubles point to a single source issue: financial literacy.
Thankfully, this is something we can change easily and smoothly. There is a silver lining!
Many of us who do invest tend to consistently outperform men, so we can definitely say that our potential is huge! By shying away from being money queens, we are leaving hundreds of thousands of dollars on the table, money that can seriously change our lives.
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What is Financial Literacy?
First of all, financial literacy is not just about coaxing women into spending less, assuming we are all shopaholics addicted to retail therapy and uninterested in finances.
The lack of financial literacy means that women tend to settle for lower income, take on more debt and don't feel confident about making financial decisions, so they rely on others or avoid these decisions altogether.
Financial literacy is the ability to not let money, especially the lack of it, control your life, your level of happiness and health. It's about making it a plentiful resources that supports you in your life journey as you achieve your goals and make your dreams your reality.
There are 5 main pillars to personal finance:
Psychology
Income
Saving
Investing
Debt and Credit
1. Psychology
With money being such a big part of our lives, you would think that handling it is a skill we teach our kids from a young age. While it's not part of formal education yet, parents are always teaching their kids about money. Usually and sadly, it's not good things, it's a blueprint based on scarcity, lack and fear about finances.
The first step in handling money like a money queen is to examine what you've learned about money so far in your life, what beliefs you hold about money, like that "money is hard to come by" or it is "the root of all evil".
Until you realign your money psychology with your goals, you'll be taking one step forward and two back with every money-related situation in your life. You can attempt to save all you want, but extreme frugality usually leads to frugal fatigue, which will make us blow our savings in something not worthwhile or financially smart.
2. Income
One of the major goals of personal finance is to get your money working for you. But until we can make that happen, the best way to improve your finances really is to increase your income.
As a society, we've been trained to believe that we need employers in order to earn a salary and generate an income. While that certainly is helpful and is the main way many people operate, it is not the only way, nor is it the most lucrative.
The truth is that it is easier than ever to create your own independent stream of income, which can even become passive. For more on the wonders of passive income, check out this article
The internet has made starting and running a business easier than ever, but that doesn't mean it's an overnight success story. Most times, we don't know what hidden talent we have that can be monetized and what people will actually pay us for. It takes time, but that's ok! The earliest your start, the better off you will be.
3. Saving
Here's another huge misconception when it comes to money. Saving alone will never save you.
And it's not just about always skipping your favorite coffee to save a couple of bucks.... You can enjoy your life today while also building a fortune. It's all about money management, learn how it works, allocate it to your different needs and allow it to grow for you. It's time to ask big money questions that will make a serious impact in your life... so you can have your coffee and sip it too, or cake :)
The truth is that your money is losing value due to inflation. If you just save without putting that money to work, you may be a little better off but you are also foregoing huge wealth creation opportunities.
The idea with saving is to build the habit to consistently contribute to your accounts, whether it is a retirement account, an investment account or any other goal you have that requires funding.
This is why we teach our students to automate the savings process. Most of us start off the month with the best intentions, kind of like new year's resolutions, right? Then life happens! things come up, and we instead choose to add leftover money to our savings accounts.
There is a much more efficient and financially smart way to deal with your money. Empower yourself and create wealth without worry or stress by automating the contribution process. Every month or every paycheck, designate a specific amount that will be automatically transferred to your savings account, that way you never have to think about it.
The first time I tried this, I was astonished at how quickly my accounts grew!
When you build the habit of automating your savings, you can apply this to budgeting as well, allocating a specific amount to different financial needs, like your living expenses and fun money. This is the benefit of being organized with your money, it's all pre-arranged and you never have to worry about budgeting, overspending or missing another month's savings.
4. Investing
When you start seeing your money as seeds that can be planted and create more money, your outlook on investing will most definitely change. So many of us are intimated and scared about investing, we say that we don't have time or that we don't want to lose money. All totally understandable, but also excuses.
The truth is that more important than knowing what the next stock to pick or how to time the market is time in the market. That means that if you haven't started yet, it's time, like now!!!
Money grows over time thanks to magic of compounding, it will grow exponentially. Thanks to fintech, we all have access to professional portfolio management at a fraction of the cost, and many managers don't have an account minimum requirement.
The same service offered by traditional advisors has a minimum of $1,000,000. I've personally had to turn potential clients away because they didn't qualify during my corporate days. You now have access to online and robo-advisors that can dramatically change the course of your life and help you create the rich and dream life you desire!
But you gotta take the first step, so if you haven't yet, find the best online advisor to work with, and open your accounts!
5. Debt and Credit
Being financially literate means understanding how debt works and never again getting stuck in it. Your debt will continue to drain your coffers until you make it a priority to get rid of it.
Credit card debt is one of the biggest obstacles to creating wealth. Fortunately, it isn't rocket-science, but it does take commitment. Most people are not even aware that they are entitled to a free annual credit report, so start by getting yours so you know exactly what you're dealing with.
The worst thing you can do for your debt is to ignore it and yet that's what so many people do.
Financial literacy made simple
yes, we get it, it all seems overwhelming. But as you can see with these 5 points mentioned above, financial literacy mean understanding just a few key pillars of your money life. You don't need to become a professional money manager in order to create wealth and the life you've always dreamed of, you've just never been taught these simple yet powerful money skills.
That all changes now, sis. Together, we will unleash your inner money queen and make sure you live the best life, I didn't come here to suffer and neither did you, it's time to create financial freedom and experience your dream life!
