Browse Tag by Financial Empowerment
Investment, Personal Finance, Women and Financial Literacy

Women Can Participate in the Stock Market with Confidence, Too

women participate in the stock market

Polls and surveys consistently showed women tend to worry more about making investment mistakes than our male counterparts do and get bogged down in all the financial jargons and end up completely confused. We’re also more likely to think the stock market is too risky. All this boils down to women’s lack of confidence and lack of knowledge when it comes to investing. In this post, I share a simple strategy that helped me make sense of the stock market. Despite the strategy’s simplified approach, it gave me the motivation and confidence I needed to get into the stock market. I hope you’ll find my story inspiring, and I encourage you to give the stock market a(nother) chance. I also challenge you to rethink some of your misconceptions about men and women. This is especially important when many women believe that men are more knowledgeable when it comes to making investment decisions, more assertive and more risk-tolerant.

When I Shop

For years, I’ve been using the unit price comparison strategy when I shop. This was something my mother taught me when we were still living in China. During my first couple years in the U.S., navigating through the grocery market was overwhelming. However, understanding numbers and being able to do simple arithmetic helped tremendously. I had no problem figuring out how much an item costs per pound, ounce or gram, square foot or meter, etc. As my English vocabulary grew, I found myself comparing unit prices while keeping in mind the ingredients list. It made sense to me that a product has almonds listed as the first ingredient charges a higher price than another product that listed almonds as the third ingredient. Once I mastered this strategy, look-alike products (and of various sizes) on rows and rows of shelves no longer intimidate me.

Women as Shoppers

As a gender, women are being praised for being good shoppers. And for many of us, we know that’s true and we own this identity. We instinctively know that $3 off a $6 sandwich is a great deal. When the math gets a little complicated, we use the trusty calculator on our phones for assistance. The calculator also makes doing price comparisons easy when unit prices aren’t readily displayed. In general, it’s safe to say that we, women, carry an air of confidence with us while shopping for groceries, household items, clothing or services. So, why do so many women feel intimidated when it comes to shopping in the stock market? Buying stocks is just another form of purchase, right?

Making Sense of the Stock Market

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Financial Empowerment, Girlfriend to Girlfriend Money Chat, Women and Financial Literacy

10 Ways Getting Your Friends Onboard Talking about Personal Finance

10 ways getting friends onboard talking about money

In part I of Girlfriend to Girlfriend Money Chat, we read that many women feel uncomfortable discussing money topics with their friends.  We also gained some insights into why women generally refrain from talking about personal finances with those they’re close with.  Then, I shared some of the internal struggles I’ve been experiencing and my vision for my girlfriends (and other women around the globe) as related to their financial confidence and sense of empowerment. In that post I also shared with my readers a plan for actions so that my behaviors align better with what matters to me.

Today, we’re going to explore additional strategies to spread financial education and support women’s financial empowerment. I’m currently using several of them and seeing great results. As you read, think about what’s applicable to you and your circle of friends. There’s no natural order to follow. The strategies are meant to be causal and subtle so hopefully your friends won’t even notice what you’re trying to encourage. Also, some conversations can flow in ways allowing two or more strategies to be used together. If that’s the case, even better!

Take Advantage of Context:

I already discussed this strategy in Part I of Girlfriend to Girlfriend Money Chat and shared couple examples. Think about the life stages where you and your friends are at (e.g., fresh out of college and climbing up career ladder? planning for a wedding? raising young kids? saving for your kids’ college education? having to provide for your parents financially? getting ready to retire?) and take advantage of those common grounds when starting conversations on money topics. There’s no doubt that (almost) every aspect of our lives involve money. Find out what you and your friends can learn from each other.

Volunteer Information First:

During your get-together with friends, usually you get an opportunity to talk about yourself. Take advantage of moments like these and share with your friends what’s happening in your financial life. Are you having a hard time keeping up with your student loan payment? Are you about to receive some inheritance money and you would like to spend that money to pursue higher education? You’re a frugal person, but your boyfriend is not? You want to buy a new refrigerator this year, but your husband wants to wait until next year? Once you start sharing, you’ll be amazed how much your friends will open up about their money situations, too.

Share Knowledge:

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Financial Empowerment, Girlfriend to Girlfriend Money Chat, Women and Financial Literacy

Girlfriend to Girlfriend Money Chat: The Challenges and My Vision

girlfriend to girlfriend money chat

Part I of Girlfriend to Girlfriend Money Chat looks at some of the reasons women generally refrain from talking about personal finances with those they’re close with.  Then, I share some of the internal struggles I’ve been experiencing, my vision for my girlfriends (and other women around the globe) as related to their financial confidence and sense of empowerment, and a plan of actions so that my behaviors align better with what matter to me.

In the same Money Fit Women Study I referenced to in a previous post, the survey also revealed that despite a substantial percentage of women having expressed the desire to become more engaged with their finances, many felt uncomfortable discussing money topics with their friends. Let’s take a look at the statics below:

girlfriend to girlfriend money talk challenges

After reading the survey results, the psychologist in me immediately got to work and started examining the dynamics within my circle of friends.

My Circle of Friends

It’s true that my friends and I rarely discuss our financial situations with each other. I’ve never thought about it this way prior to having read the survey results.

So what did my girlfriends and I typically chat about? Discussion topics usually varied from tips on styling our hair, shopping for a pair of over-the-knee boots, which dentist to go to, who to hire to remodel our kitchen, which tailor to use, how to shop for our significant others, what to wear for a first date, how to cook quinoa, which Netflix show to watch next, how to create a pivot table on Excel, what to wear with a pencil skirt, which bakery offers the best scones, and the list can go on and on. However, our conversations rarely centered around discussing personal finance topics.  As most of my girlfriends are currently between the ages of 25 and 40, many of our recent discussion topics revolved around parenting, in-laws, the workplace, health and nutrition, wedding planning, baby showers, personal styles, romantic relationships, career changes, entertainments and leisure travels. We are like a team of experts on those aforementioned topics. Everyone always had something to share and we could all relate one way or another.

Were money concerns just something that didn’t come up? A 2013 Wells Fargo Financial Health Study reported that money is the biggest stress in life for 39% of Americans (survey sampled 1,004 adults, ages 25-75). In the same survey, a third of Americans said they lose sleep worrying about money and 49% expressed regrets about saving and spending in the past five years.

So why don’t we discuss our finances? During all those get-together times, I thought my friends and I didn’t hold back…or at least I thought so until I read about people’s relationships with money and started examining my own life and those around me.

It turns out that in general nearly half of Americans (44%) said the most challenging topic to discuss with others is personal finances, whereas death (38%), politics (35%), religion (32%), and personal health (20%) ranked as less difficult (source).

Sure, my girlfriends and I loved texting each other when we found double coupons or alerting each other when an item had a price reduction. Yet, we had no idea how much each of us were spending on clothes, bags and shoes each year. We’ve causally shared how much we spent on the wedding photographer, our hospital bills for labor, the amount we spend on daycare, or the price we paid for a single bag. But these numbers were readily available. Money was certainly involved, but there was nothing too personal about this kind of sharing. We recommended which CPA to use filing tax returns, but we didn’t share how much tax we owed or how much money we were getting back. We shared how much we spent going on a helicopter ride while visiting Hawaii, but we left out that we also purchased a timeshare during the trip. We shared that we own a house and a rental, but left out that we only paid 20% down payment on each and that we were still struggling to pay off over $50,000 student loans. We bragged that we didn’t have debt, and left out that we were living paycheck to paycheck. We shared that we had health insurance, but left out that we were paying over $700 to insure a family of 4 each month.

Yes, we talked about money, but we always felt hesitant and/or reluctant to fully expose our financial situations. At the same time, very few of us felt comfortable asking another person where the money was coming from or questioned motivations and reasoning behind her financial decisions. Those of us who were listening might have shared a “look” with each other by raising our eyebrows, and the topic of discussion quickly got changed.

My Internal Struggles

I, too, feel uncomfortable discussing my financial situation with my closest girlfriends. Just thinking about it gives me goosebumps. This has nothing to do with how financially savvy I am.

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Financial Empowerment, Financial Journey, Financial Planning, Girlfriend to Girlfriend Money Chat, Marriage and Money, Money Habits, Money Psychology, Personal Finance, Women and Financial Literacy

A Woman’s Financial Responsibilities in Her Household: Part II

In Part II of A Woman’s Financial Responsibilities in Her Household, I discuss some of the barriers women face on our way to become financially literate, and how the men (e.g., husbands, fathers, grandfathers, brothers, friends) in our lives can help. In part I, I discussed some gender generalizations regarding how money responsibilities are handled in a typical household and shared some intropsection I have regarding my situation during the earlier years of my marriage. 

Women and Financial Responsibilities

Women are eager for information about financial planning and investing. In the 2014-2015 Prudential Study, Financial Experience & Behaviors Among Women, 18% of the women surveyed (survey polled 1,407 American women between ages of 25 and 68) said they would like to be more involved in financial decisions that affect them and their households. As another example, Fidelity Investments (Money Fit Women Study, 2015) found 92% of surveyed women (total respondents = 1,542 women ages 18+) wanted to learn more about financial planning, 75% wanted to learn more about money and investing and 83% wanted to get more involved in their finances within the next year. Yet, despite these statistics demonstrating women wanting to get more engaged with our finances, many of us exhibit a great amount of discomfort with our abilities to make wise financial decisions. We’re more confident in the ability of our spouses/partners to assume full financial responsibilities of long-term financial planning than our own.

Barriers to Women’s Financial Competence

Let’s take a look at some of the reasons women in general feel unprepared or not confident making financial decisions.

Fidelity Investments 2015 Money Fit study:

women financial confidence

2014-2015 Prudential study on Financial Experience & Behaviors Among Women:

women lack financial confidence

 

In sum, the barriers to women’s financial competence tend to fall under the six following categories: (1) lack time, (2) lack financial knowledge, (3) lack trust of the financial industry, (4) lack confidence, (5) lack hands on experience managing money and (6) lack support from spouse. Not surprisingly, few of these barriers are related.

If we can break two or more of these barriers the success rate to increase financial literacy among women is likely to go up. For instance, a woman with a spouse who fully supports her to pursue financial literacy is likely to have more time learning about personal finance and financial planning. The husband would be more likely to take over more household chores so that the wife can pursue her interest. As the woman begins to learn financial literacy, she will learn to read and speak the financial language. In the process doing so, she will learn about the different financial services and products.

As she’s learning she will likely discuss her newly acquired knowledge with her family members and friends. When it’s time to hire a finance professional, this woman will have been well equipped with the knowledge and skills to articulate what she wants and needs, and able to distinguish for herself good and bad professionals. This scenario is my ideal. The steps don’t have to go in this particular order. The information presented here is for you to play around with, and find out what’s best for your situation.

You may ask, where does one begin to seek out information to improve one’s financial literacy? I suggest you follow my blog and my social media, and also check out my Resources page. The Resource page is a work in progress and I update relevant materials.

Men Promoting Women’s Financial Literacy

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Financial Empowerment, Financial Journey, Financial Planning, Girlfriend to Girlfriend Money Chat, Lifestyle, Marriage and Money, Money Habits, Money Psychology, Personal Finance, Women and Financial Literacy

A Woman’s Financial Responsibilities in Her Household: Part I

In Part I of A Woman’s Financial Responsibilities in Her Household, I discuss some gender generalizations regarding how money responsibilities are handled in a typical household and share with you some introspection regarding my situation during the earlier years of my marriage.

There are many aspects to personal finance and financial planning, ranging from budgeting, paying for a vacation, purchasing a home, purchasing insurances, retirement planning and estate planning. This is important to keep in mind as we discuss household financial responsibilities.

Women and Financial Responsibilities

Gender Generalizations

In most households, the typical stereotype type is that the wife is responsible for balancing the checkbook (e.g., managing the day-to-day budget) while the husband attends to bigger picture financial planning (e.g., purchasing insurances, tax planning and investing retirement funds).

Certainly, there are households where the wife doesn’t participate much in or any part of the family’s financial responsibilities. This was illustrated in a 2013 Fidelity Investments Couples Retirement Study, where two in ten women admitted to having only some or no input into the day-to-day financial decisions in their households. Then, there are households where the wife is the CFO. And in between, there are households where both the wife and husband participate equally in every aspect of the family’s financial situations.

In general, though, women still view managing and balancing the family’s checkbook and budget as a woman’s role. These women believe such responsibilities are traditionally deemed more feminine. Husbands, on the other hand, are more suited to attending to the bigger picture household financial planning, as they are being seen more technical savvy and/or have a higher risk tolerance personality.

This gender generalization around household money management is evident in the 2014-2015 Prudential study on Financial Experience & Behaviors Among Women. The study reported that women respondents ranked themselves highest on their knowledge of managing debt and managing money (about 30% gave themselves an “A”) and lowest on their knowledge about generating an income stream in retirement and investing (less than 10% gave themselves an “A” and many gave themselves “F”). Such findings certainly give some insights into what women in general value and do well at when it comes to financial responsibilities in the household.

Many of my married girlfriends recalled their mothers taking care of the family’s basic day-to-day budget. Once married, my girlfriends just automatically followed their mothers’ footstep when it came to managing finances in their own households. Yet, when it came to their household’s bigger picture financial planning, many of my girlfriends didn’t have much of a clue.

For instance, some didn’t know all the various liabilities they have, some didn’t know all the different retirement accounts their husbands have, some didn’t know if their husbands received stock options as part of the compensation package, some didn’t know how much their husbands were putting into their deferred tax accounts, some didn’t know what their car and/or home insurances covered (or would not cover), some didn’t know if their husbands had disability insurance, some didn’t know how many brokerage accounts they had, many didn’t know what universal liability insurance is, and the list went on and on. Their husbands were taking care of those responsibilities and didn’t always involve their wives in the process, either consciously or subconsciously.

Throughout those conversations and discoveries many of my girlfriends expressed a lack of time to spend on long-term financial planning. I could relate in many ways. Like my girlfriends, I was happy filling my day with work, childcare, household chores and exercises. I enjoyed spending time planning social events for myself and my family. I took pride in doing interior decorating, planning for holiday gatherings and shopping for the lowest bargains (extremely time consuming).

When would I have had the time to learn about investing in the stock market, keep track of my family’s investment portfolio performance, peruse through the IRS website to reduce family income tax, learn to calculate how much life and/or disability insurance my family needs, or work on estate planning with my husband?

I’m sure if my life situation forced me to I would have done all that and perhaps more, however, my husband was taking care of all those financial responsibilities so that I didn’t have to. We were each great and efficient at what we “owned”. That was the whole idea behind the concept, division of labor, right? At least I thought so.

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