Financial Tips for Women

At the end of 2020, Citigroup named Jane Fraser its next CEO, making her the first ever woman to run a major U.S. bank. Women continue to make leaps in bounds in the world of finance, as well as with their personal finances — in 1974, women couldn’t even open credit cards on their own, and now more than 40% of women are the so-called breadwinners for their household.

Despite this growth, women still face hurtles when it comes to money — especially in the workplace with persisting gendered wage gaps and bias. Women also often have a different relationship with money than their male counterparts; according to research, women tend to spend more, save less, and live longer while grappling with higher average living expenses such as medical costs. Studies have shown that the ways in which women engage with money is unique, and while that can have positive impacts, it also often means that women are leaving money and influence on the table, leading to consequences like increased debt or minimal retirement savings. Additionally, the disadvantages that women face only increase based on factors like age or race; companies run by women received 2.7% of all venture capital in 2019 — a record high — and businesses run by black women received just 0.0006% of the venture capital raised since 2009.

While the strategies below are helpful for everyone, they can specifically help women navigate the unique obstacles placed in front of them and positively impact their relationship with finance. Here’s to more female CEOs!

Stay Organized

Putting your goals in writing and setting a budget to help you achieve those goals is a great way to stay focused on your financial aspirations. Naming your different savings accounts, tracking your spending, and regularly checking your credit score are all great ways to stay on track.

Stay Educated

According to a 2020 Federal Reserve report, only 32% of women with a Bachelor’s degree are comfortable managing their own investments. Reading up on finance and investments is a good way to combat that discomfort and to find financial goals that excite you. Talking to a professional, like a GreenPath financial counselor is always a smart idea and could help you overcome any confusion as you continue to learn about building strong financial habits.

Start Now

Taking control of your finances can be daunting, and the tendency to get everything perfect the first time can often discourage you from working on your financial goals at the right time: now. Start setting goals and working to reach them early without worrying too much about having all the right answers right away.

According to the U.S. Bank Women and Wealth Insights Study, less women than men under 35 regularly consult a financial advisor. Engaging with your personal finances early and speaking to a professional can help you on a path toward financial security.

Save, Save, Save

Of course, the earlier you start saving the more years you’ll have to make contributions to your savings account without worrying about needing to set aside large portions of your budget later in life to make up for lost time. This is particularly important when it comes to saving for retirement.

Data from a 2012 U.S. Government Accountability Office report showed that women often make smaller contributions than men to their retirement accounts. Coupled with the fact that women face a higher national poverty rate (approximately two times higher than men for retirement-aged women in 2010), it’s important to start thinking about retirement — and saving, in general — early. Take advantage of any employer-sponsored retirement plans, and make sure you contribute at least the amount that your employer has agreed to match if that’s an option. If you’re self-employed or don’t have access to an employer-sponsored retirement program, consider opening and Individual Retirement Account (IRA). And remember, a retirement fund is not the same as an emergency fund; you should be sure to have both if possible.

Be Mindful of When You are Borrowing

Student loans, mortgages, or car loans, as long as they fit in with your budget, are good investments to make and important steps toward building your credit. Be mindful that some debt, such as high-interest credit cards may not be as favorable when underwriters are reviewing your credit reports.

Spread the Money Knowledge

Sharing your money skills with the next generation as well as other women will not only keep you sharp on your own financial knowledge, but also help build a future full of education and financial confidence. Plus, according to the U.S. Bank report, 74% of women who ask for a raise end up receiving what they asked for; so encourage the women in your life to ask for what they deserve!

Next Steps

Now that you understand a little bit more about the gender disparities that exist in the world of both personal and professional finance, here are some steps you can take:

• Call a GreenPath financial counselor to check your credit report, create a budget, and understand more about your own personal financial situation.
• Check out these key HUECU resources that we pulled together for America Saves Week (don’t worry, it’s helpful all year long!).
• Make sure you subscribe to our blog and follow @myHUECU on social media for regular financial advice.