Female Finances: Everything a Girl Should Know When It Comes to Her Money


This is your sign to revamp your finances.

If saving and making more money were two of your New Year’s resolutions, then this article is for you. 

We all tell ourselves that we want to be better with money, but actually doing the work of change is always much harder. 

Even if your income is not where you want it to be, being smart with your money can prove more important in the end, but there are a few things you should know going into discussions surrounding money and finances.

For starters…

Women make less money 

It is well-documented and a feminist sticking point that women are not paid nearly as much as their male counterparts for the same job, making a median sum of 83 cents for every dollar a man makes, less so if they are women of color. However, women oftentimes do not have as much time in the workforce as their male counterparts. Due to societal expectations of women as caregivers, women typically are out of the workforce more often than men due to raising kids, taking care of aging parents, and looking after an ailing spouse. Women are also more likely to outlive their husbands. This seriously impacts their income and presents problems later on in life since women will, therefore, have less money to put in 401Ks and their social security benefit is based on their 35 highest earning years. According to The Brookings Institute, “on average, a woman’s social security benefits are only 80% of those received by men.”

Personal finance tips are gender-agnostic, with gender breakdowns not going much further than “women tend to do this” and “men tend to do that,” making most personal finance tips universally sound. With the deck already stacked against women when it comes to making money, it is therefore incumbent on women to take greater control of their finances.

There is some good news. On average, women typically make better investments than men in large part because they are less likely to gamble or jump on a “hot investment tip” from a friend. Women make savvier investment choices due to being more cautious and being more likely to stick to a plan. As a result, women often make better long-term investors, incrementally making more money rather than making large-scale, sweeping investments. This is interesting when you consider the fact that women invest far less than men do. If women invested as often as men there would be an additional 3.22 trillion dollars in assets available today, according to a recent study by BNY Mellon Investment Management.   

Start saving and investing money right now 

You need to begin saving and investing now with an understanding that investments and savings are two very different things. Essentially, savings are short term and investments are long term. Your savings are for shorter term goals and as a safety net in case of emergencies, whereas your investments are long term for goals like funding your retirement. The idea here is simple: the younger you are when you start saving and investing, the more money you have to put towards retirement and the better off you will be. Women especially need to have more money placed in investments since they are projected to live further into old age and therefore need to be able to afford the cost of living for longer than their male counterparts. On average, 9 out of 10 women will be solely responsible for their finances at some point in their lives, according to Fidelity Investments. 

In the event of an emergency, which can and will happen at the least convenient time and when you least expect it, you need to have easily accessible money stored away to prevent the emergency from becoming a major life setback. If you are single, you should keep six months worth of expenses in your savings account, not to be touched unless a disaster strikes. Creating a savings account means putting money away, little by little, every month or week. If you work a forty hour work week at a minimum wage job, even storing away just five dollars a week at a time is one of the best ways to ensure that your savings will add up.

The younger you are when you start investing and saving money, the more money you can put towards retirement and your own personal safety. Time is the biggest factor when it comes to your savings and investments due to the time value of money.

Readdress Your Relationship With Your Credit Cards Since You’re Probably Using Them Wrong

Credit cards are a necessary evil of modern life, with credit scores determining whether or not you are able to buy or rent a place to live, while also driving up consumerism, but people often mistake credit cards as being “free money.” 

There is nothing free about them.

Most people are probably aware that irresponsible behavior with a credit card will result in serious long term problems, but few probably know that they are already acting irresponsibly with their credit cards. 

Your credit score is fluid, with a new score being created every month, but your credit score is not just comprised of your balance. 35% of your credit score is your payment history, comprised of the expediency with which you pay it off and how close you get to your credit limit. So if your credit card is perpetually at its limit because you rarely pay it off then you are severely limited when it comes to your living situation and your future credit cards. Many people don’t realize that their credit score determines the interest rate the bank will give you on any future cards and is a determining factor when it comes to buying or renting a place to live. 

Also, when a person purchases something with their credit card, they frequently end up paying double than what the price of the product was, because they get charged if they have not paid back the loan by the end of the month. So, before you buy something with your credit card, ask yourself, “would I spend twice as much on this product than I’m already paying?” If the answer is no, either don’t buy it, pay in cash, or be prepared to pay it off as quickly as you can. 

In conclusion, begin investing and saving now, by sticking to a cautious investment plan and actively saving enough for six months worth of expenses. Pay off your credit card on time before finance charges can rack up and always stay on top of your credit score. Once a woman has achieved all of this, she has come a long way towards securing a better future for herself and closing the gender wealth gap.