Sense & Centsibility Blog

Women's Financial Success

For International Women's Day, we're talking about women's financial success! Set goals, find support, and understand any barriers you might be facing.

Group of women

What are some steps women can take to improve their financial literacy?

Being financially competent gives you a feeling of confidence and control over their financial life and since finances bleed into almost every other aspect of life it is very important for everyone to equip themselves with financial knowledge and know-how. 

There are free resources everywhere, so even if an employer doesn’t offer resources — just hit up the web. 

There are great podcasts that teach personal finances through a mix of information and humor; websites with tools, webinars that are free that can help as well. Since financial literacy can cover quite a bit of ground, consider where you want to start — basic budgeting, credit, basic savings, basic retirement or advanced investing.

When was the last time you had an honest conversation about money with a close friend or family member?

Money conversations should not be shied away from, especially with people that you trust. Getting another person’s opinion can save you a lot of financial stress. Sharing your views and experiences can also help other people. 

Many scams can be avoided if people were more open about talking about how to protect themselves and their experiences.

What are some things women can do to increase their credit score?

A December 2018 online NBC News Article explains that the wage gap is the leading reason why women (in general) have lower credit scores. Due to having lower pay, the article states, women use more of their credit lines. 

Balance to Limit ratios, or how much of the credit line is charged, accounts for 30% of a FICO credit score. Keeping in mind that the actual debt load isn’t what matters but the ratio of what is borrowed compared to what is allowed (the limit) is what matters.

What are some money challenges that are unique to women?

As already stated the wage gap is a challenge that women face, which then can hurt their credit, which makes obtaining credit and being able to afford payments harder as well.

This then also leads into financial literacy — research suggests that women still rely on (often male) partners to do the finances, which leads to issues in cases of divorce or death of a partner. It is much harder to learn about finances and cut back a lifestyle while also dealing with the emotional toll of the loss of a partner. 

While not as common as it used to be, women also face a unique challenge in less work-time — due to raising families, etc. 

This not only means less income month to month, but also a lower social security check and less likely to have pension options. This leads to long-term challenges affording basic expenses.

How can women boost their financial confidence?

Learning and doing for oneself is one of the best ways to gain confidence. 

Find a mentor that can help you, or a friend where you can learn together and continue to support each other. Having someone to teach you or to learn with you keeps you accountable and motivated to continue moving forward. 

Another way is to reach goals that you have set for yourself. 

Big dreams are great — but they need to be broken down into steps that you can work towards on a daily/weekly basis. This helps you to see progress and you can acknowledge the mini-goals you have reached.  

What are some things women can do when negotiating their compensation and asking to get paid what they’re worth?

Experts suggest that everyone look at the total compensation of the job – not just the wage, but the benefits as well.

This way you can fight for something that is valuable to you, even if it’s not just a higher paycheck – ie healthcare reimbursements, more vacation, flexible schedule, etc.If it’s a new job, make sure to go in knowing at least the range of pay you need to make and what is common for others to make in the position.

This helps to keep your eye on the facts of the situation.  

What can women do to prepare themselves for retirement?

As stated, women face a unique challenge when it comes to retirement and their “golden ages”. 

Women are more apt to go into retirement with less income. This being said, retirement savings is even more important for women when preparing as their social security is likely to be lower. 

If able, women are encouraged to start saving for retirement early and heavily. If employers offer retirement matches make sure to contribute as much as possible and talk with the retirement provider on an annual basis to ensure you understand where you stand and that it’s getting you to your goals for retirement.  

What’s your advice for women struggling with debt?

Anyone that is struggling with debt needs to have an honest inventory of their lifestyle and finances. Knowing exactly what is coming in for income and where it is being spent can help a person to then consider “where can I make changes to allow for the debt to go down?”

It may take having an appointment with a Financial Counselor to review all the options and consider the pros/cons of those options. 

Debt isn’t something that anyone has to “just live with.” There are ways to get out and stay out — which opens doors for reaching other financial goals as well.

How can women gain knowledge and become more confident in investing?

Just like with financial literacy, the first step is just finding some information. Free online resources are great (and did I mention free). If your employer offers a retirement plan, you can usually talk to the financial planner through that company once a year for free. This will help at least with the basic retirement investing. 

Beyond that, you’ll need to talk to a traditional Financial Planner — which may not be free.

Before taking with or paying a planner you will want to know what is affordable for you to invest each month. Keeping in mind invested money typically isn’t liquid, like a traditional savings account, so you will still need money for periodic and emergency expenses. 

Also know what you want to use the investment money for — what are your goals with it? This will help you to avoid being “talked into” options the planner feels is best for you.

These questions were answered by April Sanderson, an LSS Financial Counselor. All questions are a part of Experian’s weekly Twitter chat.