Empowering Women Through Financial Education
Financial education plays a crucial role in empowering women to take control of their financial futures. In today's world, it is essential for women to become educated about money matters and uplift their own level of financial wellbeing, enabling them to make informed decisions and achieve financial independence. Unfortunately, numerous studies and evidence indicate that women face significant challenges in achieving financial wellbeing, including a lack of savings and limited financial resilience. This article provides some key steps that can help women kickstart their journey of financial wellbeing.
Building a path to independence
Financial education is a key step towards financial wellbeing and equips women with the knowledge and skills necessary to navigate the complex world of money. By understanding concepts such as budgeting, saving, building assets and debt management, women can make informed decisions about their money and build a solid foundation for their financial wellbeing.
74% of women struggling with their financial wellbeing reported having no savings in place.
Financial education helps to break down barriers and stereotypes that prevent women from fully participating in economic opportunities and ensures they can achieve financial independence.
Women earn an average $253.70 less than men per week.
Financial resilience means the ability to withstand financial shocks and setbacks while maintaining stability. By becoming financially educated, women can develop the confidence to make sound financial decisions and build their level of financial resilience. They can navigate challenges such as pay gaps, career interruptions, and unexpected expenses with greater ease. Financial resilience provides a sense of control, reduces stress, and enables women to pursue their goals and aspirations.
Key steps towards uplifting your own financial wellbeing
1. Have a written financial goal plan
Have goals and a plan for your money and your life. Establish short-term and long-term financial goals which align with your personal values and vision, such as creating an emergency fund, growing your assets, saving for your future, or paying off debt. Setting clear objectives help to stay focused and motivated on their journey to financial independence. What are SMART goals? SMART goals are Specific, Measurable, Achievable, Relevant, and Time-Bound. We recommend also setting some priorities within each goal, as stepping stones to achieving them.
2. Understand where your money goes
Review your past spending based on actual spending (not wishful spending) and set a realistic budget. Most importantly know how much is left over (income less expenses). At TMC we call this “know your number”. Ensure you deliberately save this left over amount in a separate bank account and put it towards your goals. People think a budget is about controlling spending, but it’s a tool enabling you to be deliberate about saving. A budget is also a powerful decision making tool. When you have an accurate budget based on past spending, you are able to use it to calculate financial change when you are considering making big or small life decisions and it will give you an understanding of the financial impact. To help get your budget accurate track your actual spend vs your budget each month to understand variance and adjust the budget regularly.
3. Build an emergency fund
Deliberately save your leftover money each month consistently. Your first goal should be to build an emergency fund that covers three to six months' worth of living expenses. This fund acts as a safety net during unforeseen circumstances and provides peace of mind. It will also ensure that your budget is set up for success as when an expense arrives that isn’t planned for you will have funds set aside to use. It will mean you are more likely to stick to your budget. At TMC we recommend setting yourself rules around when and why you would access the emergency fund.
4. Reduce or eliminate debt
After you have an emergency fund next goal priority is to reduce or eliminate your need for debt to get by for everyday living. Educate yourself on the types of debt products, such as credit card, after pay, personal loans and home loans. Learn how they work in calculating and charging interest and what fees they charge and when. Reduce high interest debts first and tackle them one at a time, maybe targeting them by size. You will very accomplished when you have finalised one and establish a plan to repay existing debts systematically. Be the expert when it comes to your home loan, become educated about repayment strategies of using redraw and offset and how use repayment calculators to understand how much interest and time you are able to save.
5. Build up your financial knowledge
Start by gaining a solid understanding of the financial products that you have. Knowing the financial products you use is important, such as bank accounts, credit cards, home loans, and payday lenders. Understand fees, interest rates and how interest is calculated. Compare other lenders with products that you have, are you getting a good deal? To help you do this comparison especially for home loans it is best to seek a Mortgage Broker as they will have a large panel of banks, tools and knowledge to help you compare easily. There are many reputable websites you can use to assist with comparison of products such as Canstar https://www.canstar.com.au/ and there are other great websites to increase your knowledge with handy tools, such as ASIC’s https://moneysmart.gov.au/
Seek professional advice and rely on trustworthy sources to grow your knowledge over time. You also may like to subscribe to a podcast, or listen to audiobooks published by financially savvy, trustworthy people. Be open to learn new concepts and see your financial position clearly.
Uplift your financial wellbeing
Just like at the gym, a financial wellbeing coach informs, guides, and equips you when it comes to your ability to plan with, use, and save money to achieve the life you want.
At The Money Collective, we offer a personal Financial Wellbeing Coaching Program for people who are ready to make significant change in their money behaviour, set goals and become financially empowered. Our coaching program provides you with the framework you can use for life to create your financial wellbeing. If this sounds like you, book a no-obligation free chat with us now or learn more about coaching.
We also have launched this coaching as a DIY online course, check it out or get started here.
Wonder where you’re at when it comes to your level of financial wellbeing?
What are the areas of opportunity for you to be growing or doing better? Check in on your level of financial wellbeing now.
Read the latest financial wellbeing reports on our Resources page.
This article provides general advice only. It does not take into account your objectives, financial situation or needs. Before acting on any information provided, you should consider the appropriateness of the information and the nature of the financial product in regards to your objectives, financial situation and needs. We recommend discussing your personal situation with a financial professional.
Blog article by:
DARLENE NEU
Co-Founder, Financial Wellbeing Coach and Mortgage Broker
The Money Collective
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