7 Ways to be Financially Empowered
Authored by Urmi Hossain
The Mai Soli Foundation takes pride in teaching financial empowerment to our mentees as one of our key focuses. It is vital that you have the best information available, regardless of your marital status — which is why this month, in honor of Financial Literacy Month (yes, it’s a thing) — we would like to give you tips on how to be financially empowered — regardless of your level of knowledge.
There are many stereotypes around women and money; for instance, women are often considered spenders, terrible investors, or even risk-averse individuals. While none of this is true, there are some structural issues in the society where women are often seen as housewives and consequently deprived of the right tools to be financially educated.
Luckily, there has been progress and more women are stepping up to be financially responsible.
Here are the 7 steps that, a woman like you, can get to be financially free:
- Learn about your home finances — Whether you are a mother, daughter, or wife, it is always crucial to learn about your household finances. As women, especially South Asians, women are often depending on their father, brother, or husband for anything. We are not really told what the mortgage payments look like, when bills are due, or what the balances of our bank accounts are. But knowing all these will prepare you to be ready for the unexpected or to gain some basic financial knowledge. These are the minimum financial literacy concepts you need regardless of your marital status.
- Build multiple income streams — You know the saying: do not keep all your eggs in one basket? That’s what building multiple income streams means: to generate more money from multiple sources. For instance, we all have one full-time job. But what if we suddenly get laid off? Do we have another source of income? Maybe not. By having another source of income, you are creating a more stable future for yourself where in times of financial distress, you don’t need to worry and get on an unwanted debt. The easy way to build multiple income streams is to monetize your passions. For instance, do you know many languages and love teaching? So why not provide paid tutoring services in your free time? By turning your passions into an income, not only will you be more secure but also more fulfilled.
- Build your retirement account — Many people overlook the need of investing in their retirement accounts. Maybe we think we are far from retiring, so we don’t need to worry about it. But what you are really forgetting is the power of compounding. If you start investing now for your pension, your money will get compounded and grow at exponential rates until you fully retire. The sooner your start, the better it is. An easy way to get started with retirement planning is to sit down with your financial advisor and open an account. Many countries offer retirement accounts that are tax-deferred which means they allow you to grow your money tax-free. If you are a full-time professional, many employers offer pension plans as part of their benefits package to incentivise their employees, and trust me, you don’t want to miss out on that!
- Create an emergency account — With Covid, we have seen unexpected health care costs, loss of employment, and more e.g. having an emergency account helps to overcome financial burdens that we don’t foresee coming. Often if we are going through life struggles and we don’t want to add more financial stress, having an emergency account can really help. To build one all you have to do is just deposit a certain amount each month, and just use that money only for necessity. A rule of thumb is to build an emergency fund that covers 3–6 months of your expenses.
- Buy an insurance policy — Covid showed us the importance of having an insurance policy whether it is home insurance, life insurance, or even health care insurance, protection and prevention are keys to mitigating risks. If you have people depending on you or if you are the breadwinner of your household, having an insurance policy in place will provide immediate liquidity and financial coverage to your policy beneficiaries in the event something happens to you. There are many insurance policies out there. Usually, the earlier you buy these policies the lower the premiums will be. Check out more on these products with your financial advisors.
6. Invest in the stock market — There are so many myths around the stock market. For instance, the stock market is for the rich, or investing is gambling. None of these is really true. Investing in the stock market is what I consider the secret weapon to build wealth. Unlike what many people think, investing in the stock market is the easiest way to become rich. You don’t need an extended knowledge of the topic. You can DIY or simply get the help of a financial planner. The performance of the stock market has always proved to be solid and strong through the years. If you are new to this, you can get into the stock market through Index investing, Exchange Traded Funds, or simply buying a mutual fund.
7. Educate yourself - Last but not least is education. No matter what we do in life, the more we are educated, the more empowered we feel, especially for women, where education means the ability to make more choices. Any life decision we make entails being financially ready whether it is to buy a house, to move into a new country, or to live the life of our dreams.
So always educate yourself through books, podcasts, or finance courses.
Here are a few that I would like to recommend that will help you to solidify financial literacy concepts:
Books Recommendations
- Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter
- Clever Girl Finance by Bola Sokunbi
- The Latte Factor by David Bach and John David Mann
Podcast Recommendations
Women and Finance by Suze Orman
Youtube Recommendations
Investing with Rose
You can make a significant impact on our programs by donating. By working together, we can expand our Girls Empowerment Program to teach more girls how to be financially independent.
