Why women lack financial confidence
What’s your relationship with money like? Find out why women lack financial confidence, and how you can improve yours.
Our relationship with money determines our habits and the ways we spend or save our cash. Some women lavish it on family and friends, others love the rush of a bargain outfit, while a good number prefer to save it, safe in the knowledge that if disaster strikes, there’s always money in the bank.
Our decisions are fuelled by a host of emotions – guilt, fear, boredom, or simply keeping up with our social circle.
But there aren’t many women – irrespective of household budgets managed, insurance policies purchased or savings plans contributed to – that would describe themselves as financially confident. How often do you hear your own friends confess “I’m not good with money”?
But while that phrase might roll off our tongues without much thought, its impact can take a real toll on our financial and emotional wellbeing. It is preventing us from having financial independence and hindering our ability to plan for the future.
What is causing our financial insecurity?
A lack of financial education is, of course, a significant cause of this crisis in confidence. Let’s face it, how many of us were taught at school about money and saving for the future? But that’s only part of the story.
As with everything else in life, many of our traits are heavily influenced by our own upbringing – and lots of us have inherited our view of money from our parents.
In the UK, women were only allowed to open their own bank accounts in 1975 after the introduction of the Sex Discrimination Act. As a result, many women would have grown up with their father as the main money handler in the household, and we often carry these traditions down through the generations.
How financial security affects the way we feel
Our response to money can be wrapped up in emotion, too. But the way we feel about our own financial security – rather than wealth and the accrual of money per se – can also bring about much more positive feelings of wellbeing, independence, freedom and control.
According to research from the WealthiHer Network1, men are roughly twice as likely to have high self-esteem than women; those women who did describe themselves as having high self-esteem had earned wealth through their career. Close to half (46%) also said that financial autonomy was a key driver of self-esteem.
Money and how in control of it we feel, means so much more to us than just budgeting and saving. It can influence how confident we feel, how stressed we feel and can even impact upon our relationships. Research by SmartPurse found that one in two women noticed an increase in their overall confidence as a result of sorting out their financial affairs.
How can you improve your financial confidence?
To get this sense of control and to find more financial confidence, it’s vital that we recognise and acknowledge our current relationship with money and understand why we do the things that we do.
You can also improve your confidence by talking; park the embarrassment and start having frank and open conversations with your friends about money. What are they doing with their savings? Are they putting money into a pension? You will probably find the conversation, however uncomfortable it might initially feel, empowers and inspires you both.
Talking to a regulated financial adviser can also help. Sometimes it might feel too awkward to speak to a friend. A good adviser will be non-judgemental and will give you the time learn.
Research by St James’s Place with ILC2 shows that people – irrespective of gender – felt that taking financial advice made them more confident about their finances and better prepared, with women in particular saying that it improved their financial literacy and made them feel more empowered to make informed decisions. It’s an opportunity to ask lots of questions and to really understand the pros and cons before making decisions. Once you’ve gained confidence, security, wellbeing and resilience won’t be far behind.
Sharon Bonfield is an Advice for Women Marketing Proposition Manager at St James’s Place Wealth Management. Find out more about their financial advice for women.
Photo by The Creative Exchange