7 Ways to Break Through the Gender Wealth Gap: Empowering Women to Achieve Financial Equality

International Women's Day, 8th March, is a time to celebrate the achievements of women and raise awareness about the ongoing struggle for gender equality. One of the most pressing issues that women face today is the gender wealth gap. Women still experience significant disparities in terms of income, savings, and overall financial stability despite progress towards gender equality in many other areas. This disparity has far-reaching social and economic repercussions apart from its personal effects on individual women. We must address this issue and give women more financial power in order to achieve financial equality. To mark this occasion, we have compiled 7 ways to break through the gender wealth gap and provide practical steps for women to take control of their finances, build wealth, and secure their financial future. On this International Women's Day, let's empower women to take charge of their financial future and work towards an equal and prosperous society for all.

1. Enhance Your Financial Knowledge:

Insufficient financial literacy is the primary obstacle which obstructs women from achieving financial independence. Historically, women have relied on men to make financial decisions for them, resulting in a lack of confidence in managing their finances.

Hence, financial literacy is crucial to achieving financial equality and security, particularly for women who may face additional barriers and challenges. Increasing financial literacy can help women understand financial concepts, navigate financial products and services, and make informed decisions about saving, investing, and managing debt.

Women can take various steps to increase financial literacy, such as taking courses or workshops on financial management, reading books and articles about personal finance, listening to financial podcasts, and watching financial news. There are numerous resources available, including online courses, podcasts, and mobile apps, that can help women improve their financial literacy.

We at PersonalFN encourage you to expand and improve your financial knowledge so that you learn about financial planning elements and become your own financial planner to guide your family through challenging times.

If you are wondering how to become a financial guardian for your family, PersonalFN has launched a special initiative called the "Certified Family Guardian," which provides an exclusive opportunity to learn the finer nuances of money management. This initiative comprises eight modules with 24 extensive videos, which provide all the relevant tools and learning modules required to improve your money management skills. Additionally, it offers a range of other benefits to help you make informed investment decisions. For more information, read the complete details.

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2. Engage in Prudent Budgeting:

A budget can effectively manage your finances by listing your income and expenses. It allows you to identify where you overspend and cut unnecessary expenses, increasing your savings and investments. Additionally, a budget can help you avoid debt, establish an emergency fund, and achieve financial goals.

Here's how you can develop a budget:

• Make a list of all your income sources, such as salary, bonuses, rent, income from investments, etc.

• List down all your expenses, such as fixed expenses like rent, utility bills, and EMIs, and variable expenses like groceries, entertainment, and travel.

• Categorise your expenses as needs, wants, and savings.

• Identify the essential and unnecessary expenses, and set priorities for how you want to put your funds into each category.

• Based on the previous step, decide how much money to put towards each category and create a spending plan that balances your income and expenses.

After deciding on a spending plan, it is crucial to stick to it. To do so, record all expenses, avoid impulsive purchases, anticipate irregular expenses, and regularly review and adjust your budget. While sticking to a budget can be challenging, it is necessary for financial success.

3. Set Your Financial Goals And Start Saving:

Financial goals can help you prioritise your spending and saving patterns and work towards building a strong financial foundation. Your financial goals could be short-term goals, such as paying off credit card dues or saving for vacations. Medium-term goals, such as buying a car or saving for a down payment on a home loan, and long-term goals, such as saving for retirement or saving for capital to start a business.

To start making progress with your finances, it is crucial to establish achievable financial goals. Many women get intimidated when they hear of financial goals and financial planning. But you don't have to; the process is quite simple. Having clear financial goals can help you take control of your finances and improve your overall financial well-being. At PersonalFN, we believe that with the right approach to setting S.M.A.R.T. financial goals and investing, you can achieve your goals sooner than you think. Your financial goals should be Specific, Measurable, Achievable, Realistic, and Time-bound. In short, your financial goals should be S.M.A.R.T. Click here to read how to set S.M.A.R.T. financial goals in detail.

Here are some tips that can help you save money:

• As mentioned, creating a budget can help you identify areas where you may be overspending and leave more room for savings.

• Invest in financial products like SIPs and Recurring Deposits that allow automatic transfers from a savings account, so you do not have to remember to save money each month.

• Cut down on luxuries and reduce your expenses, such as shopping for cheaper groceries or limiting monthly dining outs.

• Set specific and achievable savings goals and work towards achieving them.

• Celebrate small milestones along the way to achieve your financial goals, such as paying off a credit card or reaching a quarterly savings goal. This will keep you motivated and on track towards achieving your long-term financial goals.

4. Invest in Different Asset Classes:

Due to the lack of financial literacy, accessibility and availability of suitable investment options, and trust in the financial system, many women in India, especially in rural areas, keep their savings in cash and do not invest across different asset classes. Most women are unaware of the various investment options available to them or do not understand how to invest their savings. This lack of knowledge can make investing seem risky and intimidating.

Hence, once you have gained sufficient financial knowledge, it is advisable to start investing your money across different asset classes, such as stocks, equity mutual funds, bank fixed deposits, recurring deposits, bonds, gold, and so on. You see, women have different financial goals, risk appetites, and investment preferences compared to men. By investing across different asset classes, women can tailor their investment approach to their unique needs and preferences. While it may seem risky and intimidating to invest in riskier financial instruments such as equity mutual funds and stocks, you can start with a small amount and get hands-on experience with the modern investment avenues that have the potential to yield inflation-beating returns.

Furthermore, investing across different asset classes can help women create long-term wealth, which is crucial for breaking through the gender wealth gap. Women often face unique financial challenges, such as career breaks due to relocation after marriage, childbirth, etc., and investing across different asset classes can help them build a strong financial foundation for the future.

5. Actively Involve Yourself in Family Finances:

In many households, I have seen the husband making all significant decisions regarding family purchases and expenses, while the wife's only input is typically limited to selecting the colour of the refrigerator! This is because men are traditionally seen as the breadwinners and financial decision-makers, while women are expected to take care of the household and family. As a result, women may not feel empowered to make financial decisions.

It is important for women to actively involve themselves in family finances as it can help them make informed financial decisions, plan for the future, and ensure financial security. Understanding the family's financial situation can also help women to identify potential problems, reduce financial stress, and work towards common financial goals.

You can take the following steps to actively involve yourself in family finances:

• Initiate conversations about finances with your partner or the family's financial decision-maker.

• Review and understand financial statements, such as bank statements, credit card bills, and investment reports.

• Attend financial planning meetings with your partner or the family's financial decision-maker.

• Create and manage a joint budget with your partner or the family's financial decision-maker.

• Question your partner or family's financial decision-maker whenever you have doubts.

By actively involving yourself in family finances, you can contribute to breaking through the gender wealth gap and achieving financial equality. It is important to have open and honest conversations about finances and work towards common financial goals as a family.

6. Negotiate for Higher Pay And Look to Earn Alternate Sources of Income:

One of the main causes of the gender wealth gap is the gender pay gap. It speaks of the disparity in remuneration between men and women performing the same or similarly valued work. It may significantly affect a woman's financial situation and job opportunities. For the same job, women who are paid less than their male counterparts may have fewer options to invest in their careers, save for the future, or accomplish financial objectives. Therefore, if you experience a gender pay gap or other forms of discrimination at work, you must negotiate for better pay.

While negotiating for a higher salary, women may encounter a number of obstacles, including cultural or societal constraints, lack of confidence, and fear of being rejected. In order to get beyond these obstacles, you need to be informed about the negotiation process, recognise and challenge gender bias, seek help from mentors, and develop stress and anxiety management skills.

The steps listed below can help you negotiate for a pay raise:

• Know the market value of your position/role.

• Emphasise your skills, achievements, and experience.

• Highlight your contributions to the company.

• Practice your negotiation skills with a friend or mentor.

• Be confident and persistent.

By negotiating for higher pay, women can break through the gender wealth gap and achieve financial equality. It is important to recognise the value of your skills and experience and advocate for fair and equal pay.

7. Seek Professional Help:

Seeking professional financial counselling can get you the information and direction you need to reach your financial objectives. Financial experts can assist you with creating a financial plan, managing debt, investing in various asset classes, and planning retirement. You can overcome the challenges that you may experience when it comes to managing your finances by seeking professional assistance.

Making the right option when selecting a financial planner or investment advisor can have a big impact on your financial future. Working with someone who is reliable and puts your interests first is crucial. A reliable advisor will be qualified to offer appropriate financial advice and suggestions according to their expertise, experience, and qualifications. They will give you personalised advice that is in line with your financial objectives and risk tolerance while being open and honest about their fees and potential conflicts of interest. A reliable advisor, like PersonalFN, will also take the time to hear your concerns, respond to your inquiries, and offer continuous assistance to help you reach your financial goals. Working with a reliable advisor can, in the end, provide you peace of mind, guide you through difficult financial decisions, and increase your chances of achieving long-term financial success.

PersonalFN is a SEBI-registered investment advisory firm. We believe that achieving financial goals is not as difficult as it is often made out to be. You can send an email to info@personalfn.com, PersonalFN will be happy to assist you in planning your finances wisely to help you reach your life goals.

By seeking professional help, you can gain the knowledge and confidence you need to manage your finances and achieve your financial goals. Make sure you choose a qualified and trustworthy financial professional who understands your unique needs and goals. With the right guidance and support, women can break through the gender wealth gap and achieve financial equality.

To conclude:

The gender wealth gap is a major barrier for women to achieve financial stability. Thus, it is imperative to take action to empower women and achieve financial equality. By following the seven ways highlighted in the article, women can gain the required knowledge, skills, and confidence to take control of their finances and break through the gender wealth gap, which is a critical step towards achieving financial equality for women. It is time for women to be empowered and for society to work towards creating a more equitable financial landscape for all.

Happy International Women's Day!!

KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.