I’m not one to generalise but when it comes to women and money, there are some common traps that hold us back, none of them to do with ability.
Here are but a few of them:
- We undervalue ourselves and our services and do too much for free or below market value. Know your worth.
- Our default thinking is, “I’m not good with money.” If that’s you, I challenge you to define what that actually means.
- There’s a belief that in order to invest, you need a lot of money ~ and specialised knowledge about investing. Neither is true.
- Thinking that once you do, x, y, z THEN you’ll be ready for the next step. There is never a perfect time to start anything. The best time to invest was yesterday. The second best is today.
- Being the boss at home with all the domestic incomings and outgoings, but not taking the next leap toward more ambitious financial goals. By this I don’t mean planning and saving for a holiday or switching KiwiSaver funds to a more aggressive variety. I mean blue sky dreams and the determination to chase ’em.
- Feeling inadequate, ashamed or embarrassed by the fact you’re not where you think you should be financially and making unfair or ill-informed comparisons with others. Don’t apologise. Be courageous.
I could go on but these are some of the common myths and mental mind-traps that can massively undermine women’s wealth potential.
Fortunately, I had some fierce female financial mentors growing up including my mother who was a classic First Wave feminist. She had a well-paid professional job, invested wisely while shopping supremely and accumulated a nest egg that would make any financial advisor cry with envy. All this as a single mom too.
She nagged me for years to take a business or finance course. I scoffed at the suggestion thinking it would be boring, and too greedy. Instead I ground it out for years under bad bosses in the media, earning pitiful wages learning about other people’s successes.
It took me ages to understand that having more money was a form of liberation, and a tool that could help others as well. I can still hear her words; “Money is meant to make your life easier. It gives you options.”
As luck or destiny would have it, I wound up on the business side of journalism which suited mom nicely.
When I opened my mind to it, I gobbled it up. Business, finance and economics are really just stories about people, their motivations and actions. The art of it for me, was creating narratives that others enjoyed reading about and learning from.
I interviewed dozens of successful business folk, CEOs, fund managers, reported on the Global Financial Crisis, then got thrown into the KiwiSaver space just as it was rolling out when I landed in New Zealand in 2007.
I applied all those learnings to my own situation, paid off my own mortgage, started my own business, raised two sons, all the while building my acumen and confidence in finance, which I honed even further in the funds management industry.
What I observed in that time was that there were too few women in business and finance, especially at the top.
Those outside of these sectors tended to be busy working mothers juggling a million things and leaving the investment or money management on the side. People like NZ fund manager Carmel Fisher, were few and far between and still are. It’s a shame because women need more role models like that, and not men telling them to spend less.
I get it, there is only so much time in the day.
Women tend to take on so much of the heavy lifting on the household front, and then again in paid employment, that by the time they reach midlife they’re ready to collapse.
Throw in a divorce, sick parents, lay offs, bad bosses, pay inequity and then a hormonal earthquake in their 40s or 50s, it is little wonder women’s savings aren’t half their male counterparts. Abysmally, it is 25-35% lower.
So which one of the aforementioned mind-traps is the most fatal financially? None of them are great frankly but in combination, they’re especially toxic.
One client I’m working with wanted to give an hour of her professional time away (to me) for free. I had to tell her to invoice me. She sheepishly admitted she does it all too often.
Another was reluctant to charge the industry rate for her services, short-changing herself and a colleague for years at a crucial time in her business when she’s trying to plump it up as part of her exit strategy. I’ve convinced her otherwise.
When I asked her why, she struggled to answer. Eventually, she admitted she felt badly charging a higher rate when she knew others were struggling. And this is our problem in a nutshell.
Until we start valuing ourselves, our skills and talents, we’ll remain a victim of our niceness. Don’t let that be you lady.
