As the organizer of Lola Retreat, I’m passionate about empowering women with financial tools and resources to live life on their own terms. That’s why I’m happy to partner with LendingClub on this post about how we can move the needle forward for women. This post is from Alia Dudum, LendingClub Millennial Money Expert.
From the Women’s March to #MeToo, over the last few years we’ve seen a push to break down barriers to gender equality and have challenged some of the deepest ingrained patriarchal norms. Powerful men lost their reign, while more and more women have stood up for that seat at the table.
We’ve come far in a lot of ways. We’ve stood on the shoulders of women before us, and kicked down the doors for women to follow. Our world looks vastly different than the one our grandmothers grew up in — different even from the one our mothers were raised in. But despite the progress we’ve made in the age-old fight for gender equality, we still have a long way to go to reach parity.
Particularly when it comes to money.
Yes, I said it. The ever-so touchy subject of finances, something we all come in contact with daily, yet find ways to avoid discussing. In fact, people would rather discuss their weight than talk about their credit card debt. Why? Finances can be a sensitive and taboo subject, often placed in the category with politics and religion at dinner parties. Probably shouldn’t bring them up, right?
Wrong. This may have been the narrative I and my female friends were given, but guess what? While we were silent, our male peers were talking about it and learning more about finance than most realize.
Historically, women were told they didn’t “need” to know about their finances (as long as they were married). In fact, it wasn’t until 1968 that it became illegal for landlords and realtors to refuse to rent or sell to women. Even though times have changed, girls still aren’t taught about money the same way as boys.
Women on the whole are undereducated about finances and in turn, underrepresented in the world of finance. We’re less involved in investing decision (though when we do make these decisions, they’re better). Our retirement accounts are underfunded compared to our male counterparts, yet we have longer life spans and tend to support other priorities like children, before retirement.
We still have a way to go to break down institutionalized barriers to gender equality, like equal pay and deep-seated gender bias in business. But there are a lot of individual ways to start closing the gap in our personal lives, starting with financial education.
Here are a few tips to get started:
#1 ) Talk openly about money
Not too long ago (and for some women in the world it’s still the case), financial security for women meant landing yourself a man who could provide. Now, more and more women have become the breadwinners of their households. As we move into more transparent work environments, we need to talk to our coworkers about how much they earn, discuss money with male and female friends, and do our research to be able to negotiate appropriately. Women are notoriously uncomfortable asking for more money, and undervalued for this very reason. We need to get comfortable asking for what we deserve – and to go above that, as many men will tell you. Brie Larson will be the first to tell you that you shouldn’t feel “icky” about asking for more money – that you’re helping a cause larger than yourself and setting up the next generation of women to make what they deserve.
#2) Prioritize debt reduction
One of the main ways women take on debt is through student loans. More women than men are completing college and grad school, yet upon graduation, are paying these back with typically significantly smaller paychecks than men. Unless you are entering a STEM field or other high paying profession, you need a plan to prioritize paying down this debt in strategic ways. While student loan debt is considered “good debt” because it is beneficial long term to pay for a college degree, you should be aware of how much debt, plus interest, you’re taking on because paying off high amounts of debt can prevent you from reaching other financial goals. Creating a debt repayment plan is the first step to freeing up cash and building a successful financial foundation.
#3) Learn to love investing
Simple rule: If you can afford to invest, do it, and do it now. The majority of the advice we tend to consume is directed towards the “best time” to begin investing, but it’s better to start now, even if it’s $10 a week. Women are often more timid around investing, and thus later to the game, but there are really great resources to get you started. Investing shouldn’t be scary, and according to Warren Buffet, women actually possess more characteristics of a good investor: we are “more likely to have a calm temperament, a longer-term outlook, do more research, trade less and remain steady under pressure.”
#4) Set financial goals, and do your research. Financial literacy doesn’t need to come from a textbook.
There are so many ways to educate yourself and stay on track to meet your financial goals. Find a money language that makes sense to you – it doesn’t need to come from a dusty finance book, likely written by a man. There are apps that can help you keep a budget, blogs written by women just like you, and a whole community prioritizing their financial health. Find what fits for you, set some financial goals for yourself, and stay with it! Your future self will thank you. Ready to start brainstorming? Here are a few ideas to get you started:
- Build an emergency fund.
- Pay off high-interest credit card debt.
- Save for a down payment on a home.
- Improve your credit score.
- Learn how to invest with confidence.
- Set up vacation fund and budget to avoid putting it on your credit card.
- Look into a secondary stream of income.
- Retire by age 65.
Talking (even thinking) about our finances can ruin any day – but it doesn’t need to. Find meaningful ways to address your personal financial situation, and help the other women around you do the same. There will soon be a day where we won’t need extra tips and educational resources for financial literacy – but until then, it’s up to us to break down these barriers and level the financial playing field.
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1 comment
thanks for sharing such important information with us.