Getting your finances in order may not exactly sound like a fun way to spend a Saturday. We hear you. But what if you thought of it not so much as a chore, but as an opportunity to not only upskill, but empower yourself – to achieve financial independence, feel secure, and realistically work towards some of those long-term goals you’ve got?
Now we’re talking.
The brutal truth is that many professional women don’t have a good enough financial education. It’s why we’re thrilled that 21 US states now require high school students to take a course in personal finance management, making financial literacy more accessible to all.
We can’t dodge the fact that women are still faced with an unfair gender pay gap (earning only 82 cents for every dollar a man earns), and a ‘the motherhood penalty’ when starting a family. But while workplaces, societies and families strive for greater equality, it’s important to take charge of our own financial future too.
Whatever you want to do in life – be it starting a business, developing a groundbreaking product, or pursuing the career of your dreams – you’ll benefit from reading our top tips on how to improve your finances.
So without further ado, let’s get into it!
1. Get interested in your finances
Treat it like a project
What if you were to treat your personal finance management like a new skill you need to get to that next step in your career? You’d pursue it with passion! Give. It. Your. All. And you’d probably find yourself really interested in the process.
Set aside time to delve into learning the basics of financial management, and define yourself some measurable goals. For example, you might want to save $10,000 over the next two years. Or purchase a house by the time you’re 40.
The next step is to work out how you’ll reach this.
Create a budget
Figuring out where your money is currently going is a great way to evaluate if you’re spending it wisely, or buying way too much coffee.
Budgeting apps like Mint, PocketGuard or Honeydue can help you break down where your money is going, and align your spending with your financial goals.
Separate your spending from your saving
Australia’s Scott Pape (aka The Barefoot Investor) suggests breaking your income into three ‘buckets’.
- One for daily living expenses and occasional splurges.
- One as a safety fund.
- One for building long-term wealth and financial security.
You may not use his formula to a tee, but it’s useful to distinctly separate everyday expenses from long-term savings.
2. Build your credit
For most big purchases in life (a car, a house, starting a business), you’ll need to take out a loan. But why would someone just give you a sizeable chunk of money and assume you’ll pay it back? Good question. That’s where a credit score comes in.
This is a number between 300 and 850 that tells lenders how reliable you are when it comes to paying your loans back on time. Essentially, how ‘trustworthy’ you are.
While getting access to credit can be difficult, there are some handy tech tools like Kikoff that can help you start your journey.
3. Make your money work for you
While saving money is always a good idea (because life WILL throw curveballs), some financial experts recommend investing your savings so you can benefit from compound interest. When done right, investing can help you grow your savings more quickly than if they just sit there in your bank account twiddling their thumbs.
Investing in stocks isn’t a get-rich-quick technique by any means. It requires research into what approach suits you, what platforms to use, and what stocks you want to buy. Not to mention – you do need some capital to begin with.
Get techy about it
If you like the idea of investing money for a longer term financial strategy, but don’t have a spare $1K to get started, don’t necessarily rule out investing altogether. Micro-investing is a growing trend among millennials, allowing you to make regular, tiny investments to slowly grow your portfolio.
You generally use an app (i.e. Wealthsimple or Robinhood) to manage investments. These platforms can round up everyday transactions (like a cup of coffee) and divert the excess towards investments, you can commit to investing a certain percentage of your wage, or you can make small contributions whenever it suits you.
For tech-savvy women, micro-investing can be an empowering and interesting way to take an active role in growing your savings.
Investing in cryptocurrency is another potential way to grow your wealth over time. Learn about the basics of crypto and download an exchange app to get started.
We wouldn’t be surprised if blockchain technology, the exciting emerging field on which cryptocurrency is based, draws your interest and gets you more motivated to explore your investment options.
4. Make more money
Ask for a raise
Sounds so simple, right? Well what if it actually is that simple?
Women are known for undervaluing their skills and knowledge, rather than claiming their worth and advocating for it. If you feel like you need to justify a pay increase, you could leverage things like courses and training, mentoring support, or loyalty and experience to argue your value to an organization. And it can help to research what other roles are worth in the tech market to cross-reference.
Seek alternative income streams
Whether it’s selling handmade jewellery on the side, writing freelance articles, or consulting, perhaps you could immediately make more money on top of your normal wage. Consider what skills and knowledge you already have, and how you can apply them outside of your day job to make extra cash. Investing that extra cash could take it even further.
5. Stay interested
Money can be boring. But it’s something that none of us can really get by without. It’s a shame sometimes, because what you do for work might not necessarily be what you’re passionate about.
If you struggle to stay motivated with your personal finance management, try treating it like a hobby. Get truly interested in it. Learn about different investment strategies. Try different things. Listen to finance podcasts on your commute to work. Speak to different people (including a mentor or trusted financial advisor). And keep up-to-date with the latest FinTech offerings and trends.
Please note, this advice shouldn’t be considered financial advice specific to you and your unique situation, and we recommend talking to a trusted financial advisor to really make the most of your finances.