Increasing Women’s Financial Confidence
Women have made immeasurable progress towards equality in the past century. Last year we celebrated the 100th anniversary of the 19th amendment, which gave women the right to vote. This was a pivotal moment in the women’s rights movement and has led to generations of women (and men) fighting for equal representation in the workforce. Many of these efforts have paid off as women are increasingly playing a larger role in the business world. Women currently control $11.2 billion in investable assets, make 85% of the family’s buying decisions, own $9.9 million businesses, and serve as the primary earner in 44% of families.
Women’s financial confidence, however, has lagged behind these accomplishments. Marilyn Davidson, a professor at Manchester Business School, asks her students each year what they expect to earn, and what they deserve to earn, five years after graduation. Every year there are massive differences between male and female respondents; on average, the male students think they deserve $80,000 while the female students think they deserve $64,000 (or less). As highlighted by this study, women are selling themselves short on their capabilities in the workplace.
Here are several ways women can become more financially confident:
Build on Your Existing Knowledge
Many women could benefit from refreshing their financial proficiency. Instead of taking on a big task of starting over, build on existing knowledge. There are several paths one can take to brush up on financial knowledge. The simplest is to read more. For example, commit to reading one personal finance article a week. The Wall Street Journal, Motley Fool, and Get Rich Slowly are all some sources for personal finance articles, among many others. While it may seem like a small step, reading every week (or even every day) can significantly improve your financial know-how. Asking questions whenever possible can also be a good strategy; we are often surrounded with brilliant individuals, and we can all gain from asking each other questions. While adding to your financial skill set, don’t forget to appreciate what you already know. Recognizing your strengths and current understanding will only help increase your confidence.
It is best to act as a team when making financial decisions. Talking through decisions with another person can allow you to problem-solve and learn from each other’s ideas. If you have a partner, these discussions can lead to well-grounded financial decisions that align with both of your goals. These discussions can also be beneficial if there is a sudden change in your financial situation. It will be easier to takeover money management duties if you’re involved in the process the whole time.
Hold regular money meetings to ensure that you are on track and reevaluate if necessary. These meetings do not have to be dreadful. Order pizza or takeout and celebrate your financial successes. Opt to see a financial advisor and attend advising meetings together. Find an advisor who encourages participation from both parties, and be actively involved in the conversations.
Practice Financial Empowerment at Work
Women earn over half of undergraduate and professional degrees, yet they only earn 80 cents for every dollar a man makes. The gender wage gap results from many complex factors. However, the one thing women are in control of is negotiating their salary. Unfortunately, many women fail to act on this opportunity. Linda Babcock, author of Women Don’t Ask, found in studies of business school students, that men initiate salary negotiations four times as often as women do. When women do ask for a raise, they ask for 30% less money than men.
Women can prepare themselves with effective negotiation skills. Emphasize the value you bring to the organization and why you deserve a raise. Prepare for opposition, and don’t get disheartened if you do not get the outcome you want. Be persistent and adjust your approach as needed. Don’t go at it alone! Talk about it with your career coach, or a close friend.
Financial confidence is something that can improve over time. Even the most successful women have suffered from bouts of insecurity as a result of previous decades of a male-dominated workplace. Sheryl Sandberg, Chief Operating Officer (COO) of Facebook has said, “There are still days I wake up feeling like a fraud, not sure I should be where I am”. Every woman deserves to felt confident in themselves and their abilities. Commit to improving your financial confidence and surround yourself with people who believe in female financial empowerment.
Sources: https://wealth.bmoharris.com/insights/winning-confidence-game-three-ways-women-can-boost-their-financial-confidence/, https://newsroom.cnb.com/en/personal-finance/financial-literacy/power-of-financially-confident-women.html, & https://www.theatlantic.com/magazine/archive/2014/05/the-confidence-gap/359815/