An essential component of women’s freedom, both financially and otherwise, is financial literacy. Numerous issues might arise as a result of financial ignorance. You can be more prone to run up debt, have bad spending habits, or lack long-term planning. People with financial literacy, particularly women, are better able to make their own decisions. A person who is financially literate may make the right decisions in times of crisis or unanticipated events.
But according to a report, very few women are able to expand and increase their current wealth. Just 33% of those have the confidence to invest their money anyway they see appropriate. These low numbers demonstrate that financial literacy for women is still outside of the mainstream conversation, despite the fact that women’s responsibilities in the home and in society are expanding.
Why do women need to understand Finances?
These factors account for this:
- It equips them for unexpected situations.
- Women who are financially aware can contribute to the fight against inflation and growing living expenses.
- In general, moms have a stronger effect on their children than do dads. Setting a good example for your kids by being financially literate is also important.
- The daily costs are often handled by women in homes. Knowing the best way to spend the money is therefore beneficial for them.
- Given that women often live longer than men do, they should be knowledgeable about running their daily lives and handling their finances.
- Women who are financially savvy become more self-assured in their judgement.
How can women become Financially Educated?
Women who want to learn about money have several options available to them today. There are a tonne of materials available online for anybody who wants to learn more. The stark fact is that women in India might not always have access to or knowledge of the Internet, making it difficult for them to learn these things on their own.
Self-help organisations and NGOs like the Smile Foundation can aid in these situations. As an illustration, the women’s empowerment project Swabhiman recently held a workshop on financial literacy.
Ideas to assist women in becoming more Financially Aware
For women (and men) of any age, establishing and increasing personal income is the first step toward a solid and secure financial future. Earning an income will be the top priority on your financial to-do list whether you’ve been in a typical home position and are joining the workforce voluntarily or involuntarily (widowed, divorced, or partner unemployed). If you’re just graduating high school and eager to take on the world.
- Elimination of Debt
The highest priority should be debt repayment. The bad news is that, despite the fact that women often acquire more undergraduate and graduate degrees than males, this also means that, on average, women owe more in student loans.
Any form of debt that you owe will probably incur penalties if you don’t pay it back on time. Your credit score will also be impacted by late payments.
- Credit Building
Whenever you apply for credit, lenders look for a good credit score to determine your eligibility and to set loan terms such as the interest rate and the down payment.
A credit score attempts to show lenders how likely you are as a borrower to repay the lent money on time as agreed. The higher the score, the better.
For individual borrowers, the FICO score dominates the lender decision-making process. This score ranges from 300 to 850 points.
A score in the mid-to-upper 600s (e.g. 680) is often considered good while lenders typically consider a score of 750 or 760 as excellent. It is actually left up to each individual lender to determine what is a poor score, a good score, or excellent score.
Controlling your spending must be the next stage in growing your money. The ideal approach to do this entails the design and use of a budget, commonly referred to as a spending plan. You may organise your money into five categories with the use of a budget: donating, saving and investing, paying bills, paying off debts, and enjoying. You can better understand where your money comes from and where you want to spend it by creating a budget.
Empowering Women through Financial Literacy
1. Encourage one another
We should all exert as much effort as we can to give women a voice and show them that their ideas matter. When it comes down to it, empowered women empower other women, making it imperative to promote more women into leadership roles. Women need to support and encourage one another.
We must allow women the chance to express their skills and support the advancement of other women into positions of leadership. Men also play a significant part in this. They must support and promote women in the same ways that women support and promote one another.
2. Ask Questions
It’s OK to have questions; we’ve all experienced it. Why then are people so averse to discussing money, especially women?
We reasoned that by bringing up the topic of money management—and, let’s be honest, mismanagement—we might help individuals understand how financial education may help them feel more at ease and in control when handling their finances, especially by encouraging them to ask questions.
3. Aim High
Women who are just starting their professions are urged to just go for it. Talk up. Aim high. You are capable of doing it. Our intention is to reassure each lady that it’s acceptable to not have all the answers right away. She can, however, stay on track with her objectives and live the life she desires if she has confidence and good planning skills. Any woman, in any circumstance, in any field, can benefit from having an empowered mindset and a confident outlook.
We’re inspiring women to take charge of their financial life both on and off camera, and we’re assisting them in reaching their full potential in terms of their personal, professional, and financial success.
4. Talk Openly About Money
We can assist women in figuring out how to stop living paycheck to paycheck, but before we can do that, we need to feel more at ease discussing issues related to money management.
Knowing that these topics might increase vulnerability, it was crucial for our team to encourage women to talk about the difficulties they are encountering and then assist in connecting them with informational resources that will enable them to become more self-assured.