• Aarushi Jain

How to Achieve Financial Independence for Women



It’s Women’s History Month, and women have come a long way in the workplace. Just a century ago, most women in the U.S. didn’t work outside the home. In 2019, 57.4% of all women participated in the labor force.


At the same, however, it’s important to think about the future for women. In 1949, Simone de Beuavoir highlighted the importance of financial independence for women to achieve true liberation. Financial independence refers to the ability to meet financial obligations without financial help from your parents, grandparents, etc. In 2022, women still face several challenges in the financial world:

  • Pay gap

- Full-time women still earn an average of 17% less than men each week

  • Children can disrupt a career

  • Less exposed to financial literacy

  • Women live longer than men

- Women may be left to manage finances after male counterparts have passed away


HOW TO BECOME FINANCIALLY INDEPENDENT:


1. INVESTMENT


Why is investing important?

Investments in stocks and bonds are more immune to inflation than your funds in a savings account. Additionally, today’s low interest rates do not yield much profit for savings accounts.


Alternatively, investments yield greater returns because of compounding interest. Time is your best friend when it comes to compounding interest: the earlier you start, the less you need to do. For instance, initially investing $50 and saving $10 a month for 20 years equates to a $4,759.37 profit for saving $0.33 a day, provided you earn 10% growth.


Investing is easier than you think

You do NOT need to be rich to start investing.


The thought of investing money may seem impossible to someone who is struggling to pay utility bills. However, you actually need to invest your money over time to build wealth. On many investing platforms, you can invest as little as $5 per month.


Investment Guide 101: Step-by-Step Breakdown of How to Actually Get Started

Click here for an interactive version of this table.


Understanding online brokers

Because online brokers are the most versatile way to invest, here are further broken down types of online brokerages and listed some places to get started.

  • Discount brokerages

- These brokers generally charge no flat rate for executing orders for clients, but do not offer personal consultations or advice like full-service brokerages


Click here for an interactive version of this table.


- A digital platform that uses your answers about your financial situation and future goals through a survey to offer advice and automatically invest for you.

- Several are free or as little as $5


Click here for an interactive version of this table.


2. EVALUATE SPENDING HABITS AND CREATE A BUDGET


3. START SAVING, ESTABLISHING EMERGENCY FUNDS, AND BUILDING CREDIT

Experts suggest keeping emergency funds to cover 3 to 6 months of expenses. However, 51& of Americans have less than 3 months worth of emergency funds. The pandemic certainly made this more difficult, and many Americans live paycheck to paycheck, which makes saving for months in emergency funds sound unattainable. This highlights the importance of investment.


4. PLAN FOR RETIREMENT

While women may live longer, they often have less saved and outline their money.


For more information and to help get you started, contact HelpDesk@isdus.org or call (833) 473-2020.


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