The Good News and the Bad News: Women and Financial Literacy Month
Want the good news or the bad news first?
The good news: April is National Financial Literacy Month (Hurray!) and it gives all women a great opportunity to learn more about financial literacy. Whether you’re at the peak or the foot of the mountain in your financial journey, this month offers a great excuse to boost your financial literacy. You can do so through Purse Strings.
The bad news: Research shows working women have very low financial literacy. In 2015, less than one-third of women demonstrated a basic level of financial literacy knowledge. Naturally, this can lead to debt, financial fragility and lack of retirement planning.
Curious about how Financial Literacy Month got started? Financial Literacy Month began through the National Endowment for Financial Education as Youth Financial Literacy Day in 2000 and evolved into a national financial literacy month. Both the House and Senate created joint resolutions to fully support National Financial Literacy Month
The Gaps in Financial Literacy: Explained
In a time when more female CEOs exist in Fortune 500 companies, we have a woman vice president in office and more women pursue entrepreneurship — why do women still struggle with financial literacy? One major reason: Women don’t have economic equality.
Women make less money.
Women earn about 80 to 82 cents for every dollar a man earns, which equates to over $9,000 less annually. Over a lifetime, this adds up to $456,092.
Women spend less time in the workforce.
Women spend about 12 fewer years in the workforce due to taking care of children and even aging family members. As a result, women have overall lower lifetime earnings (which means smaller Social Security payments).
Women don’t learn how to deal with money in school.
True, neither do men, but ultimately, learning how to handle money in school would help women learn about the gender pay gap and inequalities that exist in women’s financial literacy.
What is Financial Literacy?
Financial literacy is more than just about using Mint or spreadsheets to track money. Everyone should be taught that financial literacy is synchronous with your life plan. Money and goal-setting are the tools you can use to fulfill your dreams and values.
So, it goes like this:
Values →Goals → Spreadsheets
In other words, pinpoint your values, figure out your goals (which will support those values), and then use a spreadsheet to track them!
A Few Steps to Take to Achieve Financial Literacy
So, how does one achieve financial literacy? Truthfully, it’s a lifelong journey, but you can still tap into tools and knowledge to help you achieve financial literacy:
Pick a value to help you determine the role that money plays in your life.
Think big, overarching themes. For example, “I want to be able to go on tons of vacations when I retire!” isn’t a value — that’s a goal. Instead, title your value “Security.” That’s much more comprehensive.
Create your spreadsheet
This is how you’ll make your goals happen and create your financial roadmap. Here’s where you use your spreadsheet or another financial tracker to contribute $X,000 per month to your 401(k)and save up over the next 20 years to have enough to retire. Think you might need a certified financial planner to help you out? Sure, why not? Anyone you can invite on your journey to help you reach your full financial potential should sure hop along for the ride.
Orient your goals toward how you’ll fulfill your value.
Start by writing down exactly what you’d like to accomplish in the context of that value. Maybe you’ll write down “I’d like to retire in November of 2031.” Be specific — and don’t forget to actually write it down! There’s huge power in writing down your goals. Writing it down ensures you’ll make it happen.
Here’s one more step
Create more than just one value.
What about five values? What are the other roles money plays in your life? Then, sort out your goals, create your spreadsheet, and contribute money toward those goals. These could involve a plan for retirement savings, college savings for kids, etc.
Let’s Get Financially Literate Together!
So many stumbling blocks exist on the way to financial literacy — and some, like caring for aging parents or taking care of young children — can hardly be thought of as “stumbling blocks” — those privileges feel like quite the opposite!
However, especially during peak earning years, women can struggle to earn enough money, much less plan for retirement.
It’s up to you to learn about complex financial decisions to help you achieve your dreams. Let Purse Strings walk with you. Every informed financial decision you make gets you closer to achieving your goals.
Join us as we empower women to say “No way!” to:
- Saying we can’t afford to save for retirement.
- That we don’t “understand” investing.
- Saving less.
- Not facing up to long-term and overall health care expenses.
- Overcoming fear of planning.
- Not making use of available resources to the fullest potential.
Financial literacy is all about ensuring you get what you want out of life. You’ve only got one life to live, so channel your money toward your dreams.
Financial literacy month just gives you a good excuse — and a launchpad — to get there.
— Dr. Barb Provost and Maggie Nielsen, April 22, 2021
We will provide you useful and timely information you can use to be #financiallyfearless