If you are reading this, you already know what it means. It is not something that can be defined in one sentence. Wire defines it as the acts that let women achieve financial independence (1). That is a simple, condensed explanation, but there is much more to it than that. Financial empowerment for women is the feeling you get when you control your financial situation. You reach a point where you are financially secure.
Many think that the more money you make, the more empowered you are. That is not the case and should never be a thought in your head. True financial empowerment does not mean that you are rich. Whether you work as a server, store manager, or doctor, you can reach a point of being financially secure. You do not need someone else to help pay the bills, and you do not need to beg for money from anyone. You have money saved up for rainy days or for emergencies. This is financial security. This is financial empowerment in its greatest form.
This is not to say that it is an easy position to obtain. Many factors can influence how you earn money. There are even more that can affect how you spend and save. These factors are largely in your control. You can create a customized budget and track outgoing expenses. You can optimize the way you shop by comparing credit cards with rewards programs, allowing you to earn cash back on your expenditures. You can analyze your debts and establish a systematic routine for paying it off. You are your biggest advocate and your financial independence is largely in your control. Below you will find seven tips on how to become financially empowered, but you must remember one thing. The proper mindset is key to achieving any dream or goal. Here are 7 steps to take control of your finances.
1. Take Control
Before you can ever hope to be financially empowered you must act. You need to take control of your money. How you make it, how you spend it, and how you budget. That is right. You need to take the time to make a solid budget that itemizes everything that you make and everything that you need to pay. Do not do like most people do. It is not a piece of paper to write and then ignore. Post it up where you can see it every day. And follow it. It must be said again, FOLLOW THE BUDGET TO THE TEE.
You need to get rid of all your debt. This does not mean to go out and turn your power off and ignore the property owner when they bang on your door. Any unnecessary debt that you have, you need to delete. When making the budget, if you notice a debt that you have and do not need, such as a subscription to a movie streaming channel that you never watch or magazines that are delivered every month just so they can sit on the coffee table, cancel them. This includes credit cards. Cards are the easiest and quickest way to get your finances in trouble. It is all right to have a card or two because it will help you build your credit score. But only use them when needed and pay them off every month. Getting a loan can help you consolidate all your debt into one payment. Getting home loans can be a lifesaver when it comes to paying off your debt, and the bonus is that it will increase your credit rating if you pay it off on time.
You need to set a few goals to shoot for. Not ones that are out of reach. A straightforward way to take steps towards a big goal is to start with smaller ones. One step at a time. Write down your primary goal and break it down into smaller steps. Reach for one at a time until you reach the last stage. Then, do it again and reach for a new goal. There is no goal too big to obtain if you take it in small steps. Your goal may take a couple of months to reach or a couple of years. Just stick with it, follow the breakdown of steps, and reach for the stars.
Getting a degree is great. Whatever field that you have chosen to pursue. That is your choice and is a goal that you should set. In this instance, though, it is meant financially. Search online. Read some books. Talk to a financial advisor. However, you choose to gain knowledge on financial subjects; you need to do. If you do not know how to make a good budget, check out some online sources that teach you. The stock market and investing can be tricky if you are unsure about what you are doing. Investing is a terrific way to increase your wealth, though, and achieve your goals of financial empowerment.
5. Emergency Fund
The first thing on the list should have been money to set aside for an emergency fund in your budget. CNBC states that most financial advisors will tell you to have enough money saved up to cover three to six months of your bills (2). Because of the pandemic, the suggested amount has room for adjustments depending upon your specific situation. It boils down to how much you can afford to put away every month. No matter what your circumstances are, though, you need to set money aside into a fund. It is best if you have it taken straight out of your bank account, so you never have the chance to say, “I will do it next month.”
6. Plan for the Future
No matter how old you are, it is never too early, or too late, to save up for the future. You need to have some money going into a retirement fund. It is preferable to have a company-sponsored fund that will add money into the account as you do. If not, make sure you put enough in there every month to cover your expenses after hitting retirement age. There are ae several online calculators to help you decide how much to squirrel away, such as on the NerdWallet site.
7. Credit Score
This has been mentioned a couple of times throughout this article. It can not be stressed enough about how important your credit score is when it comes to anything financial. Banks look at it when you apply for a loan. Property owners will check it before selling or renting a house to you. Some jobs will check your credit score to see how trustworthy you are. It is essential to work on increasing your credit number every day. It can be a slow process, and you may see it dip down and then climb back up. If you are following your plan, there is no need to be alarmed. The important thing is that you want to get that score as high as possible without putting yourself in too much new debt.
Financial empowerment for women can be a daunting experience. However, it can also be simple if you follow the steps. Struggling through life is a concept most people are familiar with at one time in their past or present. However, financial issues can be under control quickly if you set your mind to them and follow steps to strive forward. Financial security is the first step on the road to success. Success is the road to happiness and financial empowerment.