Personal Finance Financial Advice For Women
...from money-savvy women. Get smart tips and inspiring words to help you become more financially empowered.
Women have been likened to superheroes (raise your hand if you’ve ever been called Wonder Woman or Supergirl) and it isn’t difficult to see why. Although we may not have the ability to fly, walk through walls, or teleport, we sure have a knack for juggling myriad roles and responsibilities every day—and in our world, that certainly counts as a super power.
Helped your son finish his science project? Drove your mom to her doctor’s appointment? Cooked your hubby’s favorite dish after a tough day at the office? All in a day’s work. To your loved ones, you’re a real lifesaver.
Like any superhero, though, we also have our weaknesses, our kryptonite. Different women will identify different things that make them feel powerless. For some, it could be junk food; for others, designer bags. But there’s one weakness that possibly all of us share, whether we realize it or not: For all that women can accomplish, and all the important decisions we make every day, we tend to take a backseat when it comes to money matters. And there’s data to prove it.
Sure, we usually take charge of the family’s day-to-day budget, but research shows we are less confident about making bigger, long-term financial decisions (like where to invest, if to invest at all; or how to save up for retirement) and thus prefer to leave these up to the men of the house.
Why? According to a 2015 survey by American financial services company Fidelity Investments, “lack of financial knowledge and experience” and “not knowing where to turn for guidance” are two of the leading reasons females shy away from this crucial matter. Apart from that, the survey found that women hold back from becoming more involved in their finances because of an ingrained belief that it is rude or inappropriate to talk about money. In fact, 80% of over 1,500 women surveyed in the U.S. reported to have, at one point, refrained from talking about it with people close to them, citing reasons like “It’s uncomfortable,” “I was raised to not talk about finances,” and “I don’t understand or know enough to talk about it intelligently.”
The good news is that despite their lack of confidence, Fidelity Investment’s survey respondents said they would immerse themselves more in financial matters if they received better support. According to the survey, women would be most motivated to do so if they could a) find opportunities to be more knowledgeable about their options, b) talk to people who have made similar decisions, and c) know that their spouses support their decisions.
The same trend can be observed in the Philippines, where, traditionally, women prefer to focus on domestic duties while men are regarded as the primary breadwinners, and thus, stewards of the family treasury. And while such gender roles are shifting, with more women joining the work force, we are still the ones more likely to forego employment, if needed, to concentrate on caring for children and older loved ones.
Moreover, while many Filipinas recognize the importance of saving, that’s usually as far as we go financially. This isn’t all bad; any financial adviser will tell you that getting into the habit of saving is a good step toward financial freedom. But the same experts will also point out that there are better opportunities for your money outside the bank. Many Filipinas have also expressed an interest in investing, with a few who have joined stock trading seminars in the hope of learning how to use and benefit from this wealth-building instrument. However, they are often put off, or even intimidated, by the financial jargon, as revealed by Good Housekeeping Philippines readers in a focus group discussion.
BRIDGING THE GAP
The difference in the manner women approach personal finance compared to men can be attributed to a couple of factors: Apart from being a lingering effect of oldfashioned and stereotyped gender roles, there’s the simple fact that women receive and process information in a different way— an important detail that a male-dominated financial services industry often fails to address.
As shown by various studies in the fields of psychology and neuroscience, men are more logical, spatial thinkers while women are more social, emotional beings. This could explain why the former are much more receptive to the dry, linear business language customarily used in the financial industry (and why there seems to be more of them in it). Women, on the other hand, comprehend better through discussions with peers, preferring to see the bigger picture and assess the pros and cons of any financial step through their experiences.
This gap in the financial services industry is so marked that when Worthfm, a U.s.-based online investing platform designed especially for the ladies, surveyed over 1,000 women in 2016, it found that most of them feel disconnected from financial advisors and services, with 87% feeling that the jargon makes investing seem more confusing than it should be, and 70% believing there should be financial services and products geared toward women.
All things considered, the bottomline is this: The problem is not that women are incapable of making important financial decisions; it’s that we often choose not to. And though the reasons are valid, they must be overcome. While money certainly isn’t the most important thing in this world, it plays a huge role in our daily lives. As such, everyone should have the capacity to handle it wisely.
Superman faces serious consequences and the risk of worldwide destruction if he fails to overcome the effects of kryptonite. Fortunately, the repercussions of failing to practice proper money management are not as catastrophic, though it can surely influence your success and sense of security
in life. In this day and age, when traditions are changing and financial opportunities are becoming more accessible to a wider audience, it is imperative to level the playing field by having as much of a say in our finances as our partners. And as research has shown, the best way to do that is to listen and learn from our peers.
Let the following nuggets of wisdom, culled from women’s real-life experiences, inspire you to step up and take charge of your financial well-being.
1 Do it for yourself.
This may sound counterintuitive, because women are anything but selfish. Mothers, as the family’s primary caregivers, are known to put the needs of others before their own. But that’s precisely why you need to do it: You won’t be able to support others without supporting yourself first.
It’s especially important to heed this advice now since, according to a recent study by the Pew Research Center in the U.S., 90% of women are expected to become the sole financial decision makers of their households at some point, given that marital separation rates are increasing and women are outliving men by five to six years on average.
By taking a genuine interest in your finances, and taking steps to grow and secure your personal funds, you create an environment that’s productive and stable enough to support not only yourself, but also those who depend on you. The last thing you want is to have nothing to pull you and your loved ones through when life decides to throw you a curve ball.
“Part of being a parent is accepting the huge responsibility of protecting your family’s financial future,” says Rissa Mananquil-trillo, co-founder of homegrown brand Happy Skin Cosmetics and mom of three. “Life can happen at any time—death, divorce, disability. It is your responsibility as an adult and parent to always take responsibility for the security of yourself and your family.”
Cathy Brillantes-turvill, co-owner and president of Nurture Wellness Village, a thriving spa and wellness facility in Tagaytay City, shares this sentiment. “Even as a married woman, be financially independent,” she says. “No one can predict the future and you have to be ready to take care of yourself financially. I went through a marital separation and being financially independent enabled me to make tough decisions.”
Like anything worth having in life, financial independence won’t come easy. But you have to start somewhere. For Mananquil-trillo, the first step is to address your own finances. “Personally, I make it a point to save enough as if I didn’t have to ever depend on my husband or parents to survive,” she says. As for Brillantes-turvill, it’s also important to make a conscious effort to learn about your options, and to do this as early as possible. “Immediately start financial planning. Don’t wait; act now,” she says. “The biggest enemy of being financially independent is procrastination. If you are employed, consciously invest part of your salary, save some, and spend the rest on the necessities.”
Clarissa Seriña de la Paz, co-author of the book I Wish They Taught Money in High School*, offers similar advice. “As an employee, pay yourself first,” she says, advocating the 80/20 rule: automatically set aside and invest 20% of your monthly income, and live with the remaining 80%. “This one habit will change all your money habits.”
When it comes to investment opportunities, de la Paz’s co-author and fellow financial mentor, Sharon W. Que, encourages women to read up on their options. This sort of education is an investment in itself. “Investing is only risky if you don’t have enough knowledge about it. Attend classes and read more books about it, then just do it,” says Que. “Nobody started as an expert. And if you ever fail, fail forward, get the lesson, and continue with the quest.”
2 Get out of your money comfort zone.
“It really depends on where you are on your financial journey, but getting out of your money comfort zone means doing something you’ve never done before,” says de la Paz. When she was fresh out of college, this translated to managing her own credit card and checkbook. “It was such a big deal for me,” she says. As her goals grew bigger, de la Paz found other ways to challenge herself to stretch her comfort zone, like raising funds to purchase her own home. “When I wanted to move out of our house, it was so scary for me to get a housing loan from the bank. But now I’m very comfortable with these things and they seem so trivial now,” she shares. “The list of challenges is endless, but every time you conquer one, you’ll be more confident than your older self.”
Picture your wildest money dreams and go for them. For many Filipinos, this dream is to start their own business, to generate passive income. Getting there won’t be a walk in the park, but the road to it will surely be rife with lessons that will help you carve out your financial strategy and priorities.
Happy Skin’s Mananquil-trillo, who has always been business-minded, credits
entrepreneurship as a key influence in her financial success. “When I was in grade two, I would make woven friendship bracelets and sell them to our neighbors for two pesos. As a teenager, I would set up a stall every summer to sell food to the nearby offices and townhouses. I also loved to read and write so I wrote my own short stories, poems, comics, and even created my own newspaper to sell to family and friends. Growing up, I also had a chance to do modelling projects on the side. What did I do after I had my very first photo shoot? I saved every peso in the bank.” She encourages women to seize any opportunity to go into business. “Have unstoppable entrepreneurial drive. Empower yourself to build your net worth. It’s not just about getting better at budgeting or saving money. It’s about being financially independent and gaining control over your future.”
She continues, “Block out time for your own projects. If you have a running list of dreams and money-making projects, the only way to turn those ideas into cash is to actually make time for them.”
You could also start small. For instance, try to conquer your fear of credit cards and sign up for one. This piece of plastic is not as evil as it seems. “A lot of people avoid credit cards thinking that it’s the smart move to avoid shopping-related debts,” writes de la Paz in I Wish They Taught Money in High School. While de la Paz recognizes this risk, she asserts that, if used and managed properly, credit cards can be a source of valuable learning and earning opportunities. “I have a smarter move to introduce: Make credit cards your best friends. Know all their benefits and stretch them.”
Besides the convenience it offers (hello, instant, online, and cashless payments!), credit cards can help you build a good credit standing, which can help you fulfill more financial goals later on, such as getting a loan approved. To get there, though, you have to discipline yourself to pay your bills in full and on time every month. Moreover, credit card companies offer freebies, benefits, and privileges. These are doled out as gifts or cash rebates which, if you’re resourceful enough, can augment your finances. Take Mananquiltrillo: “I love maximizing credit card benefits and privileges,” she says. “You’ll be surprised how many perks or added-value items you can get. The miles we’ve earned from credit card use have given us so many memorable family trips.”
3 Go back to the basics.
If you think that, with so much already on your plate, you can’t possibly find any more time to attend to other concerns—like setting up a business or opening a new bank account—don’t panic or flee. Return to the essentials.
“As women, we have a lot of responsibilities. We get so swamped with fulfilling our tasks that we forget the basics, such as simply monitoring our income and expenses, and even setting goals,” says Ginger Arboleda, a blogger (mommyginger. com), business and marketing coach, mom of one, and serial entrepreneur. “Our dreams stop at ‘gusto ko kumita ng pera para matustusan ang pang-araw-araw na gastusin’ but we don’t strive to achieve a specific number or list down strategies on how to obtain it. It’s time we write down this number and list down steps that we will do for the year.”
True enough, goal setting is one key to success in any endeavor. Experts say the more specific your goals are, the better your chances of achieving them, because having a clear vision of what you want to attain affords you focus, direction, and better control over the steps you take to get there. It also helps to write these goals down to make them real and tangible, so you’re motivated to realize them. In personal finance, this means identifying, for example, who your investments are for and how much you need to save up for each goal. This is a basic yet valuable strategy that women tend to overlook, but can help us actually make things happen.
Be more mindful of your cash flow, too. Keep track of your income and expenses, as Arboleda says. Build a good financial foundation with these steps and watch where it can take you.
4 Don’t be afraid to take the plunge.
You’re better at making financial decisions than you think. “We have general characteristics that make us even better with money than our male counterparts,” says Rose Fres Fausto, behavioral economist, financial literacy advocate, and columnist at philstar.com. “This is not meant to pit women against men, but just a reminder that if we embrace some of our inherent qualities, we can actually become great money managers and investors.”
Biological and psychological research proves that women are hardwired for financial success. How? Unlike men, we don’t have high levels of testosterone, which has been associated with increased risk-taking behavior. “And we know that investing has a lot to do with managing risks,” says Fausto. “The generally calmer temperament of women is an advantage in investing.”
Because of the lower levels of testosterone in women, we tend to be less aggressive whereas men are prone to be overconfident. “Men think they know more than they actually do while it’s the opposite for women. We are more realistic and not overly optimistic,” says Fausto. “In other words, men are more capable of irrational exuberance in investing.”
Citing a recent study by professors from the University of California – Davis in the U.S. on the investing behavior of men versus women, conducted over a six-year period, Fausto says married men traded their stocks 45% more than women, while single men traded 67% higher. “Maybe we can assume that the wives helped in toning down the irrational exuberance of their husbands in their trading activities,” she says.
“Here’s the interesting part,” she adds, “Because of the lower transaction costs incurred by females, their net returns are higher than their male counterparts.” Apart from that, Fausto says women’s naturally calmer temperament conditions us to “put in more time and effort researching possible investments, considering more angles and details,” before we make any decisions.
5 Be a role model.
Always remember that there are people who look up to you—your children, most importantly. As you set them up for success in life, it is crucial to break the cycle of financial illiteracy and ignorance by setting an example. Don’t skip nor gloss over the subject of finances when you teach them about the ways of the world. Learn, and then pass on what you know.
As a practice, you can start by giving them full control over how to spend their allowance. Speaking from experience, Mananquil-trillo says, “The first time I ever received baon from my parents was in grade two. They gave me twenty pesos a week, and I had a choice of either using it to treat myself to a hotdog bun for recess or saving it for something I really wanted, like books and stickers, which I loved to collect.” The mom of three cites this exercise as one of the things that “laid the foundation” for her own financial independence.
“I practice the same with my children. It teaches them the value of money at an early age and how to be thrifty right from the start. We also become a team in saving money,” she says.
Ladies, believe it or not: Our inherently calmer temperament gives us an advantage when it comes to money management.
Having good money habits means more than just budgeting.
Saving is a good first step, but it’s investing that’s going to take you to financial nirvana.
So much to do, so little time? Don’t panic if you’re feeling overwhelmed by it all. Go back to the basics.
Don’t hesitate to teach your young ones about money. They’ll thank you for it.