A recent study by Merrill found that only 52% of women feel “confident” about investing and talking about finances. However, another study by Fidelity found that when women invest their money, their portfolios outperform those of men by 40 basis points. So if you’re a woman wondering how you can become more confident with your finances and integrate better financial decisions in your life, here are five places to start.
1. Stop accruing debt
Debt can have a negative impact on your financial stability as well as your confidence. For instance, you may feel you can’t afford to make sound financial decisions, and you may be less likely to invest or save. If you want to integrate better financial practices into your life, start by reducing or eliminating your debt as soon as possible. You can use online tools like budget trackers or a debt consolidation loan calculator to help you become debt-free as quickly as possible.
2. Educate yourself
If you want to integrate better financial practices into your life, you must understand the basics of personal finance. Start by reading up on financial topics and learning about your options. There are plenty of resources available, including books, articles, podcasts, and videos.
3. Get a financial planner
If you’re not confident in your ability to invest and manage your finances, consider working with a financial planner who can help you create a budget, identify savings goals, and make other important financial decisions.
4. Build a savings account
One of the best ways to build savings is to start with an account with low minimum requirements (like $100) and then add a little money to it each month or with each paycheck. Not only will you have a healthy emergency fund should you need it, but with the power of compound interest, you’ll earn more money over time without needing to do anything extra.
5. Create and stick to a budget
One of the best ways to manage your finances is to create and stick to a budget. This will help you stay on top of your spending and ensure that you’re not overspending on unnecessary items. If you’ve never used a budget before, it’s easy to get started. First, figure out your monthly expenses (including rent, groceries, utilities, etc.), and then add in any other costs or savings goals you allocate money towards. Next, list all the places from where you earn money every month.
Once you have your complete lists of costs and revenue, it’s time to start divvying up your income and figuring out where money needs to go. If you end up with extra cash after allocating funds, you can either put more of it into savings, invest it, or treat yourself.
However, if you come up short and can’t pay your bills, you’ll need to either cut costs by eliminating bills or switching to cheaper options. You can also find new ways to generate an income, such as starting a side business, selling off things you no longer use, or working extra hours at your current job.
The bottom line
It’s essential for women to learn about personal finance to make sound decisions they can feel confident in. By integrating better financial practices into their lives, women can ensure that both themselves and their loved ones are set for future generations.