4 Steps Every Woman can Follow to Become Her Own Chief Financial Officer
I’ve always been an advocate for women to make sure that they own their personal economy. A 2018 study conducted by the Pew Research Center found that in the United States, women earn, on average, just 85% of what their male counterparts earn. Women not only earn less than men, they also save less, live longer, and have more long-term and overall health care expenses—on top of the same living expenses as men.
These statistics add a sense of urgency to the need for women to assume the role of Chief Financial Officer and take control of their finances. It’s important to move beyond managing finances to thriving financially and in order to do that effectively, there are four steps that every woman should take to establish a strong foundation on which to build on.
Step 1: Become a lifelong learner
In short, participate in your own financial rescue mission by educating yourself on money management and investing. There are so many wonderful resources available in the form of books, podcasts, videos and articles. If you find that you have limited time to read or listen consider replacing listening to music with 20 minutes of an audiobook or podcast every day. You can also commit to reading 5-10 pages of a book every night. You’ll be surprised how much reading and learning you can do with these small adjustments to your daily routine.
Step 2: Create a Budget
Did you know that the quickest way to give yourself a raise is to create a budget? Yep! Creating a budget gives every cent of your income an assignment. Oftentimes money is wasted on expenses that aren’t a necessity because you aren’t holding yourself accountable for what you spend by implementing a budget.
When you create a budget the first thing you want to do is pay yourself and then your creditors. The money that you pay yourself should be used for savings and investing. You want to make sure that you have a plan to pay off consumer debt using money in your budget as well. Once you pay off the bad debt you free up even more money to save, invest and give!
Step 3: Build up an Emergency Fund
Building up a six-month Emergency Fund is ESSENTIAL to your overall financial peace. In life, emergencies happen. An emergency could be a broken boiler or refrigerator or something even bigger like the loss of a job. Whatever form in which it shows up, you must be ready. Start with saving $1000 and then build up your fund to six months of living expenses.
Step 4: Invest at least 15% of your gross income
You cannot save your way to wealth. The only way to reach your long-term financial goal is to be a savvy investor. There are many investment vehicles that you can use to grow your money. There’s real estate, stocks, bonds, precious metals etc. The most important thing is that you put your money to work. If you feel insecure about making the right decision, consider hiring a financial coach or advisor to help you on your investment journey.
In our free resource library, we have a great resource that will help you get started investing in the stock market. Use the form below to sign up so that you can start on your journey to becoming an active stock market investor!
You have all that it takes to thrive financially. All you have to do is take the first step. What you focus on expands, so the more that you learn and apply the more that you will see resources and connect with people in your network that can help you reach your financial goals.
