For anyone who follows the news around women and money, it’s clear that many of the reasons that women lag behind men in financial areas are beyond any individual’s control—the persistence of the gender pay gap being a primary example.
But with all women are doing to earn higher degrees—a feat at which they’re outpacing men—and break into traditionally male-dominated fields, the results of a recent Financial Industry Regulatory Authority (FINRA) Foundation study are all the more surprising: Women consistently scored lower than men in financial literacy.
The reason? Women were more likely to select, from the multiple choice answers provided, “I don’t know” as their response. This drove down their overall scores. Female financial advisors (who themselves are vastly underrepresented in the field) say that even today, they see women in male-female relationships deferring to men in investment decisions. Are women suffering a crisis of confidence about money?
While some disparities between the genders may be a long way from being resolved, feeling empowered about your financial knowledge is under women’s control. “So many of us feel ashamed for not being financially literate,” says Shannon McLay, a financial advisor and founder and CEO of The Financial Gym. “We assume that simply because we are adults, we should know all of this stuff, even though we were probably never formally taught. But how would we know?”
If that sounds like you, take action with these strategies to boost your money confidence.
1
Make Financial Literacy a Priority
Learning money skills and becoming more financially literate isn’t hard, says McLay, but it does take time. (Good news: Just by reading this article, you’re already prioritizing your money skills.) “There are so many resources available now, between books, blogs, podcasts, and YouTube channels,” she says. So how should you choose which ones to read, watch, or follow? McLay says that while the money experts each have their own personalities and perspectives, ultimately there’s a lot of overlap when it comes to the advice they give. “Find the one that resonates with you the most,” McLay says.
2
Take Emotion Out of the Equation
When you don’t feel in control of your finances, you may end up becoming overwhelmed or anxious just thinking about money. “It’s common to have a lot of emotions tied in with our finances,” says McLay. By developing financial goals, creating a budget and planning for the future, you’ll feel empowered—and stop reacting to money concerns emotionally.
McLay’s philosophy is that anything financial is fixable—it just requires work and a willingness to go beyond your comfort zone. McLay also encourages clients to adopt a gratitude practice to help put their financial life in perspective and manage their emotions about money. “For many of us, our financial problems are very much first-world problems,” she says. “No matter how much stress you’re under, remember to count your blessings; and that sometimes just our access to credit and debt is a privilege in and of itself.”
3
Create and Track Your Goals
“You’re going to be more successful and motivated long term if you have clear goals and a way of tracking your progress,” says McLay. “We often get impatient, as if accomplishing amazing things only takes a few days or months. But in reality, it’s the small changes we make on a daily basis that compound over time.” Treat each goal like an expense, and then automate the corresponding weekly or monthly contribution to your savings or retirement accounts. “If it’s really important to you, you will make the necessary lifestyle and spending changes in order to make it happen,” she says.
4
Start Investing
“If you are already participating in an employer retirement savings plan like a 401(k), then congratulations, you are already investing!” says McLay. If you’re thinking of investing more—and you have a solid financial foundation, free of credit card debt and complete with an emergency fund—go for it.
“The movies make us believe investing is like day trading. In reality, investing for the common person is very boring,” McLay says. Feel free to start small. “A way of easing into investing is to just start by contributing a certain amount each paycheck.”
5
Hire a Professional
“Working with a pro to help you become financially literate is just the same as hiring a mechanic to fix your car,” McLay says. A good advisor will walk you through everything from establishing goals to creating a budget and hold you accountable along the way so that you’ll succeed. And remember, a financial advisor is working for you. If you feel like an advisor doesn’t take the time to answer your questions or doesn’t take you seriously, simply say, “Next.”
Maridel Reyes is a journalist based in New York. Her work has appeared in Forbes, Bloomberg Businessweek, the New York Post, USA Today and The Boston Globe.