A new study suggests women are behind on their finances because of one big factor.
When it comes to earning, investing and saving, women tend to lag behind their male peers. This gender difference is often blamed on women’s caregiving roles, which often leads them to scale back their workforce participation when they become mothers or preemptively select more flexible jobs that come with lower pay.
According to a Fidelity survey released in February of 1,542 women over age 18, another overarching factor might be at play: a lack of confidence. While 92 percent of respondents said they want to learn more about financial planning and 83 percent said they want to be more involved in their finances, the majority also reported feeling uncomfortable talking about money, even with friends, spouses and financial professionals. In fact, 4 in 5 women said they have avoided talking about finances with someone they’re close to because the topic is too personal, or it feels uncomfortable to discuss.
In a video of women talking about money that Fidelity released with the study last month, many women cite earlier habits, sometimes dating back to childhood, of watching men handle the finances in families. The survey also found that just 28 percent of respondents said they felt confident when it comes to picking investments without help, and 37 percent felt confident about handling retirement planning on their own.
According to CFP (Certified Financial Planner) here are 8 Tips for Financial Confidence that are sure to do the trick:
1. Disconnect from the negativity. Unplug the TV and turn off your wireless devices. Recognize that repetition does not mean intensity. Just because you’ve heard the negative news about economic growth four times from different sources does not mean that it is four times as bad.
2. Live with the new reality. If you haven’t fully absorbed the existing bad news in your expectations, it’s time to get it over with. That means accepting the current value of your home, your 401(k), or your brokerage account, and building a financial plan from there. It is much easier to remain confident if you see yourself making a fresh start toward building your financial security rather than waiting for the good times to return.
3. Weather-proof. Build your investment or retirement portfolio to withstand the good times and bad. Focus on high quality investments and an allocation that you can maintain through thick and thin. A well-diversified portfolio will always have a slice of “good news” – something that is doing well in hard times.
4. Live within your means. Your paycheck, rather than the GDP numbers, should be your economic bellwether. If you have predictable and steady income, make sure you are setting some aside in the event that your employment situation changes. When you can spend the money you have left at the end of the month rather than having to borrow ahead, your outlook on the next month – and the next – will improve significantly.
5. Educate a child. Just spending time with a child – observing their energy, curiosity, sense of wonder and imagination – inspires hope for a better future. Put that hope to work by investing in our future by helping children learn skills – math, language, financial literacy – that will help them succeed.
7. Learn a new skill. Study a new language or take a course in a subject matter that you never studied in school. Expanding your horizons opens more possibilities for tomorrow, in terms of careers, supplemental income and personal satisfaction.
8. Give it away. If you want to feel “rich,” make a contribution to someone less well off than you – your favorite charity, a family member, a friend. Or if money is truly scarce, donate your time. The sense of connection to others, and being able to help, usually puts our own financial difficulties in perspective.
Make a financial plan. CFP Board research has demonstrated that those who draw up a written financial plan – ideally with a CFP® professional – have more confidence and are prepared for what is to come.
Read the full report by Kimberly Palmer on How Women Can Boost Their Financial Confidence!