When it comes to finances – like so many other things in life – women are not like men. Yes, we earn less (the salary gap between men and women is still stubbornly and appallingly stuck), live longer and are still typically the ones to step out of the workforce to take care of our children and our older loved ones.
But the differences are much bigger, and more nuanced, than that. Blame it on nature, nurture, or both: women receive and process information about money in their own way. We want to know the big picture before we make small changes. We want to explore all the options, or as many as possible, before pulling the trigger. And women want to learn about money from another human being.
Some two-thirds of affluent women who say they are confident investors (the majority, by the way, are not) were taught by another person rather than some other method, according to research by US financial-services provider Wells Fargo. We feel most comfortable when we are learning from and around other women.
Lesson 1: You’re a role model. Act like one
When it comes to managing money, what you do can have even more of an impact than what you say. And though you don’t have to broadcast your salary to everyone in your office (or social circle), revealing your numbers every so often is a very nice way to pay it forward.
When setting an example for other women, particularly ones you’re trying to mentor, transparency is the key. Magazine editor Meredith Rollins says that before she left her last position, she sat down with her successor and told her exactly how much money she was making to help that woman with her own salary negotiations.
She did it because she’d undersold herself at a prior job – she learnt later that people junior to her were making more than she was – and remembers how rotten that felt. But sharing was empowering, she says.
‘With the women on my staff, I’ve tried to be similarly open, telling them the details of my own financial missteps (a botched retirement annuity (RA), credit-card debt) at earlier ages in the hope that they can learn from my mistakes.’
Lesson 2: Bad stuff happens
If you don’t have an emergency stash now, aim to stockpile R10 000. Then up your game and work on putting together a six-month cushion if you’re a one-income family, a three-month cushion if you’re two. For career resilience, keep your CV and LinkedIn profile up to date.
The solution is to know that setbacks will come and to prepare, both in your career and financially. It gives you at least a small sense of control over your own life. That’s the purpose of the ‘FU fund’ (yes, it means exactly what you think it means) that Joanna Coles, Chief Content Office (CCO) for Hearst Magazines, has long kept.
‘I’ve always tried to keep enough money that I would be able to leave a job if I was being asked to do something that felt really uncomfortable, so I would be able to survive for six months,’ she says. ‘It gives you a great sense of confidence. You realise that what money buys you is a certain degree of control and freedom.’
Related: 5 great budgeting apps
Lesson 3: You’re playing the long game
If you’re not on a track you find fulfilling, sit down and chart out, on paper, what would make you more satisfied. Then, carve out at least 10 hours a week to devote to making progress. And if you don’t think you have 10 hours? Keep tabs on how much time you spend a) watching television and b) on social media. There they are.
In a reality-TV world, it sometimes feels like you can become a success overnight. In fact, notes Robin Koval, coauthor with Linda Kaplan Thaler of the book Grit to Great (Random House USA) , ‘The culture gives us this expectation that if you haven’t made it by the time you’re 25 – if you’re not Mark Zuckerberg – then you’re washed up.’
Nothing could be further from the truth. What it takes is persistence, drive and the tenacity that allows you to stay committed to a task for a long time.
Lesson 4: Financial success is all about good habits
Investing for the future is not optional. When you start to make contributions to savings and investment accounts, you’ll likely feel unsure at first. But stick with it. In a few months, start visiting those accounts each month. You’ll see how your money is adding up, and your confidence will start to boom.
When the markets are down – and that will happen – fixate not on how much money you have, but on how many shares you’re buying, since that’s when you’ll be able to buy more. That should keep you going strong.
When Gretchen Rubin, author of Better Than Before (Broadway Books), first started studying the topic of happiness, she noticed a pattern. ‘Whenever people started talking about a big happiness challenge, they’d point to something that was really a problem with a habit,’ she says.
‘Someone would say, “I’m exhausted all the time.” That’s about the habit of getting enough sleep. Or they’d say, “I’m constantly running short of money and I’m really anxious about it.” Well, that’s about the habit of sticking to a budget.’ What Rubin realised was that we can use habits to make ourselves not only happier but healthier, more productive and – yes – richer too.
PHOTO: iStock/Melpomenem
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