Strides have been made for women in finance, with the likes of U.S. Treasury Secretary Janet Yellen, ECB president Christine Lagarde and Citigroup’s Jane Fraser now assuming top industry positions.
But when it comes to personal finance, all too often they lag behind their male counterparts; demonstrating less tendency to invest and grow their personal wealth.
There are many reasons for this imbalance. Persistent and pervasive pay inequity means women often earn less than men for the same work, while more money still is lost to unpaid caregiving roles. Meantime, typically longer life expectancies coupled with rising divorce rates leave many women solely responsible for household finances later in life.
“Women need to understand there are certain factual trends at play,” Lorna Tan, head of financial planning literacy at Singapore’s DBS Bank told CNBC Make It, “and they need to have a holistic financial plan in place.”
However, there are ways women can overcome those hurdles and take better control of their money, insisted the bestselling personal finance author, highlighting her top advice.
Critically, said Tan, women first need to grow more confident that they can take control of their personal finances.
One study found that women generally allocate more of their finances to savings than men (41% versus 35%), yet they invest far less in riskier assets with potentially greater returns (25% versus 32%).
“This is usually because they are less confident,” said Tan. “But I believe that with education and better understanding, women can become more comfortable managing their finances.”
AsiaVision | E+ | Getty Images
Tan recommended starting out by developing a basic understanding of savings and investments through articles and attending free financial planning webinars online. From there, you can go more in-depth on particular topics and investments that appeal to you.
However, she said to be careful that the advice targets “holistic” financial planning, rather than just promoting one area like stocks.
Create a plan
Next, map out your financial situation and the personal goals you are working towards. Then, think about your financial habits and figure out a budget to keep you on track.
If you are young, please look at the magic of compound investing.
head of financial planning literacy, DBS Bank
Tan recommended starting out by setting aside at least 10% of your income for savings …….