By Gina Heng, Co-Founder & CEO, Marvelstone Group
Editor’s note: This is the second part of a two-part article. The first section explains the financial literacy gap, and the second one focuses on solutions to tackle it.
Taking the Taboo Out of Money
Women tend to hold ourselves back when managing and growing their finances. A survey conducted by Fidelity in a 2015 found that more than 80 percent of women were keen on learning more about financial planning and becoming more involved in managing their finances. At the same time, a similar number admitted that they refrained from discussing money with family and friends because it was “too personal” and private a topic of conversation.
Money seems to be a taboo topic and most of the women consulted for the survey felt uncomfortable because they thought they knew too little about the subject to talk intelligently. This suggests a clear lack of self-confidence. The same survey showed that, paradoxically, women actually enjoyed better long-term investment performance than men when they did engage!
If you think that these problems happen only to women who are less financial savvy, you’d be surprised by the number of professional women I have spoken with who still do not feel confident about managing their domestic finances. A successful mid-career professional told me that she had more than a year’s salary sitting idly in her bank account as she did not know how to manage her money, nor did she dare try for fear of making an error of judgment.
Don’t overthink. Just get started.
Some things like our salaries may be beyond our immediate control. But my main advice for women is not to wait until you feel ready to start to control and grow your finances because that day will never come. Instead, you can take action today by making yourself these questions:
- What motivates you in life?
- What are some things you want to accomplish to feel satisfied with life?
- Money and time aside, what would you like to do in life?
Women tend to ask themselves these questions all the time. Being clear about the answers will not only help with controlling and growing money but will also help in incorporation money matters into your life more naturally. It’s important that women become comfortable with the idea of finances, whether for retirement, investments, or personal purposes.
After all, it’s all about growing financial confidence.
According to Fidelity, women are often less financially confident than men, but outperform males when it comes to investments and savings.
Being financially confident means understanding how money can assist in achieving financial goals, understanding financial jargon, and knowing who and where to turn to for financial advice. The best type of confidence arises from asking questions to gain knowledge and then sharing it with others. Women need to be more comfortable about taking risk and discussing investments and money.
Have you always left it to your spouse to manage the finances?
—Start by familiarizing yourself with the ins and outs of your household cash flow this month.
Have you always wanted to discuss personal finances and get advice from others?
—Start by gathering a group of close friends or mentors you can trust to discuss and learn from one another.
Have you always wanted to grow your savings?
—Start setting aside a small sum monthly towards a long-term savings fund and take time to choose a high interest savings account that best suits you.
Have you always wanted to start investing but never knew how or dared to?
—Perhaps, start by looking at lower-risk investment options such as mutual and exchange-traded funds, and try to understand their fact sheets and fund prospectuses. When you better understand the product and the risks of the investment, consider setting aside a sum you are comfortable investing and track your performance over time. You might lose some money, but these are valuable experiences that will make you a better investor in the future.
Big visions seem less scary when broken down into simple, achievable steps. By taking a small step today, you have already gained more control than yesterday.
Gina Heng also founded MissKaya.com, a women-centric financial services platform, under the Marvelstone Capital (a portfolio company of Marvelstone Group). Prior to founding Marvelstone Group, she was a venture partner at Yozma Ventures (Korea) and co-founded asset management firms, One Asia Investment Partners and Leonie Hill Capital in Singapore. Gina has also worked at Bank of Tokyo-Mitsubishi and Cerulli Associates, where she gained expertise in sectors such as asset management, telecommunications, commodities and infrastructure, in Southeast Asia, China, India and Australia. She holds a B.A. in Political Science and Economics from University of Pennsylvania.
Miss Kaya is a lifestyle focused financial platform to educate and equip women, especially those in Asia, to take control and grow of their finances. It believes that female empowerment begins from understanding, owning, and growing our finances. Therefore, it aims to create a safe and trusted community where women can learn and build their personal finance knowledge, and make their money work for them. www.misskaya.com