Empower Your Financial Future: Essential Tips for Women

Women face unique challenges when it comes to financial planning. From the gender pay gap to lower rates of saving and investing, these hurdles can make financial security seem elusive. However, taking charge of your finances can help you make the most of your money and alleviate some of the stress that comes with financial uncertainty. Here are five actions you can take to help take charge of your finances.

1. Boost Your Earning Potential

Women in the U.S. earn 16.4% less on average than men in comparable positions, according to 2023 data from the Bureau of Labor Statistics. Maximizing your income is key, and it can have an exponential effect. A higher salary becomes the basis for bigger raises and creates a salary history that can help you justify a bigger leap in earnings when you get a promotion or change jobs.

How to Start

• Ask for a raise or find a better-paying job.
• Negotiate a better salary package.
• Update your resume for your next job hunt and use pay transparency to size up salaries.
• Find a side hustle to generate additional income.
• Consider the value of going back to school.
• Get a business loan to start or grow your own business.

2. Plan for Emergencies

Plenty of things can go wrong. When they do, having an emergency fund and a plan in place can help you avoid turning a life emergency into a financial one. Setting aside three to six months’ worth of expenses in emergency savings helps ensure your finances aren’t derailed by a medical emergency, unexpected home repair, sudden job loss, car accident, or other crisis.

How to Start

• Create an emergency fund. Aim for at least three months’ expenses, but consider saving more if you’re the breadwinner or a single parent.
• Decide where to keep your emergency fund. Savings accounts that you can access easily tend to be a good option. Consider high-yield savings accounts.
• Choose the best health insurance, auto insurance, and life insurance for your needs and budget.
• Make a plan to pay for major home repairs; learn more about home equity loans and home equity lines of credit (HELOCs).
• Have a plan to defend against financial abuse.

3. Begin Investing Early

Investing can help you grow your money to meet long-term goals like retirement or building wealth. Because returns are typically higher for investments than for traditional savings, investing can help you maximize your money to compensate for wage gaps, or career gaps for parenting or caregiving.

How to Start

• Choose an IRA, Roth IRA, or brokerage account to get started.
• Don’t fall into the gender investing gap.
• Find out how women can overcome investing disadvantages.
• Consider finding a financial advisor for personalized investing advice.

4. Pay Off Debt

Paying off high-interest credit card debt can save you money in interest charges, help lower your credit utilization rate, and free up valuable credit you might need in the future. Create a plan to pay off credit cards, student loans, and other debt that may be weighing you down.

How to Start

• Take on your high-interest debt with a systematic plan to pay it off.
• Use debt consolidation to streamline your debts and potentially lower your interest costs.
• Maintain good credit so you can access loans and credit cards at the best rates.
• Repair your credit if you’ve had a setback.
• If you’re feeling overwhelmed, get more information about nonprofit credit counseling.

5. Actively Manage Your Money

Playing an active role in your own finances is essential, even if you work with an advisor or manage money with a partner. It’s the best way to stay engaged and aware so you can meet goals, respond to challenges, and take advantage of opportunities to improve your financial health.

How to Start

• Master the basic skills of money management and take an active role in planning and decision-making.
• Be a budgeting whiz. It can help you in every phase of life.
• Get comfortable talking about money, especially with the core people in your life.
• Plan for a long retirement. Women outlive men by nearly six years, on average.
• Learn how to manage credit in a divorce and, if necessary, survive as a single mom.

The Bottom Line

Taking charge of your finances can be daunting: There’s a lot to learn and a lot to manage. You may want to take advantage of financial planning resources that offer fresh tips and strategies for women looking to manage their money, generate income, save, and invest.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate your financial journey and achieve your goals.