By Hanniz Lam
We all have a mental image of what a financially confident woman looks like: she understands finances effortlessly, can talk about investment accounts for hours, and effortlessly navigates the most difficult money management issues. However, most women would not consider themselves financial superheroes. They are frequently overwhelmed and perplexed by financial issues.
More often than not, women feel less financially engaged and assured than men. As a result, plenty of women rely on their male partners or other men in their lives to take care of their finances.
But this approach can put a woman in a poor financial situation.
UNDERSTANDING PERSONAL FINANCES
Having financial confidence doesn’t mean knowing how to ace a high school add math exam. It means having a working knowledge of all the little things that actually aren’t so little.
These can include having a clear picture of money coming in and money going out, as well as setting up short- and long-term financial goals. Remember: you don’t have to memorize the income tax incentives and rebates to figure out how retirement accounts work or what type of home financing makes the most sense for your needs.
Of course, you don’t have to shoulder all the responsibility of constructing a robust portfolio. It can make sense to work with a trustworthy, knowledgeable financial advisor, CPA, or attorney.
Nevertheless, understanding the basics of finances can improve your ability to make the wisest financial decisions. The more you know about your income, expenses, investments, and accounts, the more confident you’ll feel about your current financial situation.
BOOSTING YOUR FINANCIAL CONFIDENCE WITH EASE
Maybe you’ve always let someone else cover your money matters, or perhaps you just pay the bills and hope for the best. Either way, you can begin to learn how to manage your finances more proactively by taking just a few simple — but essential — steps:
Map out your finances.
You don’t have to be an Excel spreadsheet expert to be able to create a quick, two-column document outlining your monthly income and expenses. Charting the flow of money into and away from your accounts can be quite revealing.
If you like having everything on a digital interface, there are lots of great apps to help you begin mapping out your finances and budgeting. Just make sure that whatever app you download has a user experience that you like. That way, you’ll be more apt to keep it updated.
Understand your company’s benefits.
Part of being confident in your financial situation is understanding your employer’s benefits and how those benefits affect your paycheck, savings, retirement, taxes, and more. There’s no shame in asking to speak with your human resources representative or a representative of your third-party benefits provider, either. Getting questions answered can open your eyes to new possibilities.
For example, you might discover that you can save much more for your later years and lower your tax burden by changing how much you contribute to your retirement accounts and into which buckets you contribute. Making the most of your benefits could quite literally transform your financial future.
Find a holistic financial advisor.
You might think you need to be rich to talk to a financial advisor. Really, anyone can benefit from working with an advisor, as long as the advisor focuses on more than investment management. A good wealth manager will start by asking you about your goals, such as saving for your child’s higher education costs, retiring early, or starting a business. They should use these goals to determine your investment allocation — not just sell products to you.
Look for someone willing to explain financial concepts and build your fiscal skillsets. Ultimately, you should feel comfortable with the financial advisor you select. If all goes well, you’ll be working together for decades.
Educate yourself on personal finance.
So many free and low-cost finance-related resources are available today from YouTube on TikTok and plenty of blogs. Take 15 minutes daily to cruise through some recent articles. Borrow books from the library on wealth management tips and techniques for everyday people.
Over time, you’ll demystify how money works and change your mindset to a more positive, confident one. Rather than assuming you’re just “not good with money,” you’ll realize that you can be as wise as anyone else if you have the right information and tools.
Right now, your financial confidence level might not be high. But you’ll be amazed at how quickly you start viewing money in a different light when you make it a priority to increase your financial knowledge.
Your financial confidence level may be low right now. When you make it a priority to improve your financial knowledge, you’ll be surprised at how quickly you begin to see money in a different light.