Women are making up a bigger part of the workforce and the economy. Here’s how you can make the most of your financial power as a woman.
Women are gaining ground in the economy and the workforce. In fact, according to recent data from both Chase and Refinery29, women are the primary breadwinners in 40% of households. However, that doesn’t always mean women are reaching their full financial potential.
If you’re a woman who’s looking to make the most of your money and prepare for a better financial future, here are five ways you can take your earnings to the next level.
One way to boost your earning power is to be clear about why you deserve to make more. Connie Hill, education coach at TD Ameritrade, pointed out that when asking for a raise, it’s important to be clear about your worth.
“Before you go in, review your accomplishments so you can make a results-oriented presentation,” said Hill. “Be clear about what you did and how it positively impacted the company.”
Even when you offer objective proof of your worth, though, it might not be enough to get that raise. Harvard Business Review found that women are less likely to get raises than men—even when they ask for them. One way to address this issue is to push for pay transparency. “Sunlight is the best disinfectant,” or so the saying goes.
Hill noted that it’s also a good idea to find out from the person you report to exactly what they want you to do in order to be eligible for a raise.
“If they want you to work on a certification or reach a certain benchmark, find out what that is, and then keep good records,” Hill said. “Show how you’re meeting the criteria and learn to communicate that so your worth is evident.”
“There’s always going to be another recession or financial pullback,” Hill said. “If you want to make the most of your financial power, it’s important to be able to plan ahead.”
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When times are good, you can leverage your finances and position yourself in a way that shores your finances up for the bad times. One way to do this, Hill suggested, is to set up an emergency fund. Many experts recommend that you set aside at least three to six months’ worth of expenses in an account to draw on if necessary.
Here are some other ways you can prepare for the future:
“Even if you don’t start cutting back today, knowing which items you’ll start with and being aware of signs that we might be approaching a market top can help,” said Hill. “You never know exactly when the next market pullback will be, but when you start seeing the signs, or you start getting concerned, use that intuition to make some changes.”
Even with the strides made in their involvement in the workforce, women still make up less than 50% of U.S. workers, according to the U.S. Department of Labor. One of the issues is that women are still more likely to leave the workforce when they have children or other caregiving responsibilities. However, women also return to the workforce, which provides them with opportunities to boost their earning power.
Hill recommended doing some research before returning to the workforce by finding out which skills are marketable and updating old skill sets.
“Things are always changing, so find out what you might have missed. It’s even better if you’ve managed to stay somewhat up to date while you’ve been out of the workforce,” Hill explained. “It might take an investment, but taking some classes and getting an updated certification might be worth it.”
It might also be possible to frame some of your experiences while out of the workforce in ways that show their usefulness. Time management, social media, communication, and adaptability are all soft skills that can translate well when you return to the workforce. If you’ve done some volunteering while out of the workforce, that can also make a positive—and profitable—impression.
One way to harness your financial power as a woman is to start a business. Between 2014 and 2019, the number of women-owned businesses in the United States grew by 21%, according to American Express. Women are definitely flexing their power as business owners, with employment by women-owned businesses growing by 8%—as compared to 1.8% for all businesses. Women-owned businesses saw revenue rise to $1.9 trillion between 2014 and 2019. That’s not too shabby.
If you’re a woman who wants to start a business, Hill recommended starting by considering what you’re good at.
“Look around and see if your talents and interests fit a niche or market need,” said Hill. “There are all sorts of ways to use technology to sell goods and services, in addition to finding ways to sell in your local community.”
Developing a solid network and seeking out mentors can also help you move forward with a business and increase your chances of success.
Finally, one of the best ways to make the most of your financial power is to learn how to invest. According to a study by Bank of America Merrill Lynch, women are widely confident in their ability to pay bills and set budgets, but only 52% feel confident in managing investments, as compared to 68% of men who feel confident about investing. On top of that, 41% of women in the study wish they had invested more of their money.
By learning to invest, you can take your finances to the next level.
“When I started investing, the information was scattered around and there weren’t the same resources available,” said Hill. “Today, though, technology makes it easy for almost anyone to learn about investing and get started.”
Hill pointed to resources from TD Ameritrade that offer basic, step-by-step investment help, as well as webinars and classes. The important thing, she said, is to start with something simple and then learn about more complex strategies as you gain practice.
“You don’t need a lot of money to get started,” she said. “However, getting started today, and being consistent, can be one of the most powerful ways to make a difference in your financial future.”
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