Men can be financial “hotheads” who like risk, whereas, women are more cautious and want more security. The famous saying, rephrased, can be “men buy shares from Mars and women have a savings account on Venus.”
More women, be it single mothers or married women, are bearing the financial burden of earning. This income is not to support them but to support their families. But there is always a gender pay or wage gap. Women are earning less than men, even for the same position or job profile. A woman is paid approximately 20% less for the same job function. In addition to this, women lose more income over their lifetime because of things like maternity leave and to raise young children. This can even halt their career progression and impacts their earning potential.
Women tend to live longer than men, and this means that women need more money to support themselves and their dependents. Therefore, it is essential that women make their financial success a priority and they need to plan accordingly.
It is quite vital to talk about how you feel and how does your partner feel. It becomes essential to discuss your financial goals and to make financial decisions together.
Steps for successful women to create financial plans
1. Start Small and stay involved
Money conversations do not have to be long ones. Small savings can create a significant corpus. It might seem convenient that one partner takes care of the finances, and the other takes the back seat. However, both partners should know what is happening, money wise, in their lives. Be sure to have a monthly check-in so the both can assess where they stand.
2. Plan for your children’s education
It’s a good idea to start saving for your children’s education much in advance. This step helps you to avoid student education loans. This step of saving at an early age also gets taught to your children, and they learn this good money habit at a very early age.
3. Emergency Fund
This is a backup plan in the event of an uncertain event. With this in hand, a person need not worry about taking unnecessary debt during an emergency. This emergency fund can be created if one makes it a part of the budget itself, and women are pros in making such budgets. Always be cautious not to spend this money for non-emergencies.
This is one of the most important things when it comes to the topic of financial plans and making budgets. It is quite vital to talk about how you feel and how does your partner feel. It becomes essential to discuss your financial goals and to make financial decisions together. Such communication helps a lot in achieving specific long-term goals.
For example, a couple is in a discussion where the husband wants to buy a car whereas the wife sees a room redecoration as the priority; here communication of financial goals and plans will help them achieve a concrete decision.
5. Save for retirement
Retirement planning should be done well in advance. This will be the corpus that will help you support your lifestyle after retirement. Many employers also have various schemes that help create this corpus fund that can be utilized after retirement.
Women have definitely brought down many barriers in our male-dominated society. Nonetheless, some clichés still remain in the minds of people. This places many constraints on the financial knowledge and activities of women.