The Most Important Financial Literacy Skills for Women | Make Money Work for YOU
We, as women, need financial information that works for us, so we can plan for our futures appropriately. The reality is that many women find themselves at a disadvantage as compared to our male counterparts. Women typically make less than men; many take time off work for maternity leave or child care, which means wage losses; and women on average live longer than men, so our retirement funds must stretch farther. These three factors alone make it critical for women around the world to learn the most important financial literacy skills, and use them to create the wealthy futures we want.
No matter where you are financially, or what stage of life you are in, the information below will help you start your financial literacy journey, so you can make money work for YOU!
Your Money Philosophy
The way you think about money affects the decisions you make, which in turn affects the actions you take, and that leads to the results you get. It follows then that if you change the way you think, you will change your results. This applies to every area of your life, including your money.
To start to shift your financial results, you have to begin with your beliefs about money. They were formulated when you were a child. What did your parents or guardians say about money? If they had a scarcity mindset, then you may be operating from a place of fear, without realizing it, and that will certainly affect your financial results.
The book I wrote with Kim Scouller, How Money Works for Women – Take Control or Lose It, addresses money philosophies and recognizes, “It’s not your fault… but it is your opportunity!
“Once you recognize where this negative programming came from, it is time to focus on you. Who are you? What is important to you? And what do you want your life to look like? What does a rich life look like to you?
“It’s important to understand what you can control. You can control your thoughts, your words, and your actions.”
Taking the time to go inward to understand the way you have been taught to think about money, and then develop your personal money philosophy toward the abundant life you want, are the first steps in building financial literacy skills. Your mindset is a critical factor for financial success.
Understanding Debt Management
For women, money can feel intimidating but that is only because it’s unfamiliar. We are not given the financial information we need in school. That means we need to acquire the knowledge as adults, and a key part of the knowledge we need to gain is debt management.
Once you learn how to manage your debt, it all becomes so much easier. This is why I love to speak, write and give many Tips to Navigate Debt and Turn Bad Debt to Good. When women get the knowledge they need to manage their debt, they take a step closer to financial freedom.
A big part of financial literacy and getting to financial freedom is understanding the difference between good and bad debt and how you can use good debt to your advantage.
That starts with looking at all your sources of debt. Many women find this to be a bit of a stressful exercise, but it is one you must do. Things that you don’t look at won’t change.
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We all need to know our starting place to build a strategy toward a wealthy life. For your personal finances, that means knowing how much bad debt you really have and what you need to do to get rid of the bad debt.
When it comes to bad debt, here are some simple steps to take to start that process:
Once you have this information you can start making a better plan to reduce your bad debt.
Some women like to focus on the source of debt that has the least amount owed, to clear it off quickly and gain a win. Others like to pay off the debt with the highest interest rate first or the one with the largest amount owed. No matter which you choose to do, make the commitment to put any excess money at the end of each month toward clearing your bad debt.
Investing and Building Wealth
Once you manage your debt and learn How to Focus on Your Finances, building wealth becomes so much easier. We all want different things and have different priorities. That means we all must start with our personal goals for our lives and our money, which will direct the types of assets we choose to invest in.
To be effective, you must separate your goals by timeframe. You will have immediate goals, long-term goals, and some goals that fall in-between.
Your answers to those questions will help you formulate an investment plan for each stage. Then you will make choices about how to free up your money, the spending plan you will create, and which assets you will invest in to support your goals.
Every dollar you invest now, positively impacts your ability to reach your immediate, mid-term and long-term financial goals.
Even if we find ourselves at a disadvantage financially, the great news is that women who invest regularly, outperform their male counterparts!
That means when you have the most important financial literacy skills, you will know better ways to make money work for you, which closes the financial gap over time. You just have to start making those positive financial changes now, to build the wealthy life you want and deserve!
Women need information specifically designed to help them on their financial literacy journey. This is why I invite you to get your copy of How Money Works for Women – Take Control or Lose It. It follows nine women, each at a different age and in a different stage of life. That means, no matter where you are right now on your financial journey, you will get financial information relevant to you! CLICK HERE to get your copy now.