Get Off Your Assets and Conquer Your Money

In honor of International Women’s Day 2018, I’m collaborating with over 40 other bloggers to inspire women to improve their finances. Check out posts from my amazing co-collaborators on the landing page for the #WomenRockMoney Movement, and share how you plan to improve your financial position this year using #WomenRockMoney. 🙂

******

Women are taking the world by storm. We are entrepreneurs, corporate professionals, home economists, and more.

In all of our busyness making boss moves, though, we often neglect self-care and self-improvement.

In our financial lives, this means our financial literacy tends to be sorely lacking.

Women are failing at money

Ladies, we have GOT to get our financial lives together.

We are still paid 20% less on average than our male counterparts. Starting a family tends to have a far greater impact on our career trajectory than that of our male colleagues.

These things are largely outside of our control.

Combine those facts with our tendency to bury our heads in the sand when it comes to money, though, and you’ve got a recipe for disaster.

Being knowledgeable and informed about money is well within our control.

A few stats:

1. Over 40% of women struggle with money.
2. We hold more debt than men and tend to pay higher interest rates.
3. On average, we have one-third of the retirement savings that men have.

Why do so many of us fail to educate ourselves about our finances?

A lot has to do with the way we’re socialized.

Raise your hand if you’ve ever heard someone say that handling money is a man’s job. Or that men make the money for women to spend it.

Yeah…hear those kinds of things enough and you start to internalize them.

LISTEN UP:

Women are more than capable of understanding how money works.

We just have to take the time to learn.

No more flying by the seat of our pants and assuming things will turn out okay.

No more relinquishing all decisions about money to our partners.

No. More.

Times change, minds don’t

It used to be that a woman was expected to stay home, cook, clean, and care for the kids, while a man was expected to work and provide for the family, including managing the family’s finances.

These days, family structures are different. The doors are wide open for women to work if we want to, and in many cases, we’re the primary breadwinners in our households.

Nevertheless, many of us still subconsciously hold onto those traditional views of men’s and women’s roles when it comes to money.

Meanwhile, we are marrying later in life, if at all. Among those who do get married, divorce rates are skyrocketing. In heterosexual couples, wives tend to outlive their husbands.

In other words, it’s pretty much guaranteed that we will have to manage our own finances at some point or another.

On top of that, our lower wages, often shorter working careers, and longer lifespans mean we tend to have less money than our male counterparts to cover us over a longer time period.

Women are 80% more likely than men to fall into poverty in their old age. 

If that sobering fact doesn’t spur you to action, I don’t know what will.

We’ve got to wake up and make sure we understand what’s going on with our finances, whether single, in a committed relationship, or married.

Improve your financial literacy today

Fortunately, there are plenty of resources available to help jump-start your financial education.

Don’t get overwhelmed. You don’t have to go from zero to Warren Buffett overnight. Take your time, and learn at your own pace.

Start by getting a basic idea of your own finances and then branch out to learn more. Below are a few tips and recommendations to get you started.

Identify your assets, liabilities, and net worth

Anything you own that has value and could be converted into cash is an asset. Things like your house, checking accounts, savings accounts, investment accounts, retirement accounts, and the like fall here.

Next, you want to identify your liabilities. This includes any debt you owe or financial obligation you have. Your mortgage, student loans, credit cards, and similar accounts fall here.

Now subtract the total of your liabilities from the total of your assets. The difference is your net worth.

If your net worth is negative, work on paying off debt and/or saving and investing.

Figure out your cash flow

You may be wondering how the heck you’re going to pay off debt, save, invest, or reach other financial goals. Knowing how much money is coming in and where it’s going is the key. This is the first step in understanding how to manage your money.

Create a budget that outlines all of your income and expenses for the month. The difference between these numbers is your monthly cash flow.

Hopefully, it’s a positive number. If your expenses are greater than your income, you’ll need to decrease your expenses, increase your income, or both.

Keep learning

Now that you’ve got a basic understanding of your own financial picture, it’s time to beef up your financial knowledge.

In 2018, the world is at our fingertips. We can learn pretty much anything we want to know with the click of a button.

Almost everyone carries a mini computer around all day. Put it to good use!

Here are a few online resources you may like:

• Money Essentials from CNNMoney – This site offers lessons in different categories of personal finance. It’s basically an all-in-one money tutorial and a great place to start for beginners.
• Yahoo! Finance – The personal finance page on this site is top notch and includes a “Fix My Finances” video series that teaches basic finance information through viewer questions.
• Women Who Money – This website was created by women especially for women. It offers beginner-, intermediate-, and advanced-level materials to meet you wherever you are in your financial literacy journey.
• MyMoney.gov – This U.S. government site is dedicated to teaching basic financial information and providing resources and tools to help you manage your money.
• Mint – This website and its free companion app are perfect for people who are just starting to get control of their finances. It allows you to connect all of your accounts and see at a glance how you’re doing financially.

Internet not your thing? Check out these great books:

Broke Millennial by Erin Lowry – This book tackles personal finance topics in a fun but straightforward way. It covers everything from the psychology of money to credit scores to financial planners. It’s a great guide for someone just starting to manage her finances, and because each topic stands on its own, you can jump around and read only the chapters that apply to you.

The Total Money Makeover by Dave Ramsey – Learn to conquer your finances in 7 simple “baby steps.” Filled with testimonials from others who have followed the plan, this book is a step-by-step guide to winning with money. We started following the book’s general principles and paid off almost $50,000 last year and over $20,000 so far this year.

I Will Teach You To Be Rich by Ramit Sethi – Despite the scammy name, this is a great basic guide to personal finance. This book lays out an easy-to-follow six-week program to get your finances on track. It covers everything you need to know from the bank accounts you should get to how to invest.

Listening more your speed? Try these great podcasts:

• So Money – Created by Farnoosh Torabi, this podcast was created by a woman for women and tackles money issues with humor.
• The Dave Ramsey Show – Learn about personal finance as Dave answers listeners’ money questions through the framework of the “baby steps.” (The debt-free screams are super inspiring.)
• The His and Her Money Show – America’s #1 Money Couple, Talaat and Tai McNeely, discuss money, marriage, and everything in between in this podcast.

Whatever your preferred method of learning, I hope you’ll check out some of the resources above and expand your personal finance repertoire.

Connect with others

You already know at least one person who is willing to help you on this journey. I know of more than 40 others. 🙂

Connecting with others helps keep us accountable and motivated as we strive to reach our financial goals. Seek out ways to connect with others who know about personal finance that you can learn from.

Does your church offer a personal finance small group? Do you have a friend who is into personal finance and can give you advice or answer questions?

Find someone to connect with as you learn. It will help tremendously.

Final thoughts

Learning to manage your money doesn’t have to be hard. With a little time and effort, you’ll be a personal finance guru in no time.

How will you improve your financial literacy this year?