When it comes to money, women often find themselves struggling to be proactive. Whether it’s because we are simply overwhelmed by the mental load and everything on the to-do list or because we find the entire subject overwhelming. It certainly is no surprise when we consider traditional upbringing’s – while boys and men were taught that their priority is to financially provide for the household, women were taught that we had bigger fish to fry (namely the ever-growing pile of laundry).
However, nothing could be further from the truth. Women, especially, need to be more proactive when it comes to making the most of the money we make, because we face challenges that men typically don’t:
- We live longer than men, meaning our money needs to last longer in retirement.
- We are more likely to live with a chronic illness.
- We are more likely to work less in order to care for children or elderly parents.
- We typically earn less than men.
- Women tend to pay more for goods and services than men (also known as the pink tax).
In this article we explore simple ways that you can get off the sidelines and take control of your financial future (and independence!).
Step 1. Get clear on your Why
All change takes motivation, and this is why knowing your ‘why’ is the first step towards figuring out how to achieve your goals and the life you enjoy. By knowing your ‘why’, not only will you be more motivated to work towards your goals, it will also help you understand the fears that have been holding you back so that you can overcome them.
Here are a few questions we love to ask our clients to help them get clear on their why:
- What does your dream life look like? What would you be doing more of/less of?
- What financial decisions are you most proud of?
- What are your biggest financial regrets?
- What are your fears about the future?
- What are your biggest challenges when it comes to growing your wealth?
Step 2. Negotiate your salary
Given that we tend to spend less time in the workforce and are often paid less along the way, it is crucial for us to fight for and preserve our worth!
It all starts with successful salary negotiations – whether you are applying for a new job or well overdue for a rate review. One of the best ways to know what you are worth is to take a look at the going rate for job opportunities in similar roles and use this information to support your request for a higher rate. It also helps to have a list handy of all the times you outperformed in your role or achieved a positive outcome for your employer.
Remember, it does not make you a disloyal employee if you speak with recruiters looking to hire someone like you. It makes you a smart employee who knows to value her worth.
Step 3. Tell your money where to go
Despite being the cornerstone of every successful financial plan, the idea of a budget is one that many people resist. It’s a word we often associate with lack, deprivation, and judgement, which is why we prefer the term ‘cashflow’.
Understanding where your money goes can help you to make more conscious financial decisions. It means directing your money with intention rather than spending blindly on autopilot. It is only by factoring in and balancing your long-term goals with your immediate needs that you will have the capacity to create wealth.
If the idea of tracking your spending makes you cringe, know that you are not alone! The good news is that there are many apps that can help you to automate the process and make it much easier to track where your money is going.
You can also enlist the help of a financial adviser! At Serendipity we have software that allows us to analyse our client’s spending patterns direct from the source, their bank accounts.
We often have a hilarious fun time with our clients when it comes to their budget and sticking to it, so it’s not all doom and gloom!
Step 4. Face your fears
While our fears about the ‘what ifs’ in life can make it tempting to bury your head in the sand, this is unlikely to make those fears permanently go away. On the other hand, taking action now can help you to address those fears head on and enable you sleep easy at night.
Some options worth considering are:
- Contributing more to super while you are working in order to protect your retirement.
- Obtaining personal insurances such as income protection and trauma cover to help you cover your bills if you are off work for extended periods due to medical reasons.
- Investing your money rather than keeping it all in cash to help you achieve financial independence.
If your cashflow doesn’t permit you to put all of the above strategies into action at the same time, it is time to return to your why from step 1 and use this as a guide as to which fear needs to be addressed first.
It is important to remember that financial plans are not set-and-forget. Life will continually evolve so your financial plan needs to evolve alongside it. Your income can change (for better or worse), as can your goals, your career, your health and your living arrangements, just to name a few! So, make sure to pop a reminder in your calendar for every 6-12 months to review your finances. This can include shopping around on your bills, checking in on your super and investments, and updating your insurance policies, important documents (such as your will) and cashflow.
While the idea of a financial plan can feel daunting and overwhelming at first, know that you don’t have to do it alone. As financial planners our specialty is in taking away the overwhelm and helping you to stay on track with achieving your lifestyle goals.
Step 5. Stay on track
If you have any questions or would like a helping hand, feel free to contact us at Serendipity Wealth Advisors for a confidential financial planning chat. Our female clients sometimes tell us they feel embarrassed by where they are at with their finances. Rest assured we will not judge you on your past financial life and want you to embrace your future. We are available for appointments in our Newcastle office or Australia wide via video conferencing.
What you need to know
This information is provided by Serendipity Wealth Advisors. The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information.