Women's Financial Empowerment
At Mana we use JP Morgan assumptions to project our future investment growth. We attend their virtual events to stay up to date on any current events and financial analysis. Last week they held their annual Women On the Move leadership day, so we decided it would be a great opportunity to talk about women and empowerment in today’s blog post.
As a company founded by women who are determined to disrupt the current state of financial planning, attending these types of events is key. Empowering traditionally underserved populations, like women, is one of our core missions. Although this conference was geared towards females who work in finance, we took away four fantastic lessons to share with women of all backgrounds and experience. We’ve summarized what we learned in the rest of the post below.
Four ways to empower yourself around your money:
1. Know that you miss 100% of the chances you don't take
It is common for women to not apply for positions or promotions they don't feel 100% qualified for. There have been dozens of articles written on this topic in the last couple of years. As stated in this Forbes article, “Men are confident about their ability at 60%, but women don’t feel confident until they’ve checked off each item on the list.” The advice: it is necessary for women to have more faith and confidence when advocating for themselves.
At the conference, the CEO of General Motors, Mary Barra (a panelist on the JPM Leadership conference) was asked to give one piece of advice to women in the professional world, and it was spot on this topic:. “Don't take yourself out of an opportunity before you have even explored it. This is beyond the auto industry. When women get offered, or look at a new position and say, ‘wow I have 8 of the 10 requirements, I'm not going to apply.’ A man will look and say, ‘I have six. I will go for it’.”
She went on to say, “My message to women is go for it. Even if you don't get the position you will learn so much from the interview process and be better for the next opportunity. And who knows, you might actually get it. Go for it. Don't hold yourself back.”.
As women we should embrace this mentality in all aspects, but especially in finance. Feelings of self-doubt or unworthiness come up in many financial situations, far beyond employment. They can even crop up around opening investment accounts, starting a business, or purchasing real estate. We are sometimes held back by the idea of, “what if”, or doubts around our capabilities. It’s not always easy to challenge this notion, but the three ways of empowering yourself can help you to deconstruct it.
2. Ask for what you deserve
No matter what industry or seniority level, you should always advocate for yourself. Remember that you are the only one who knows what you do best. No one else has as deep insight into your capabilities, so don’t waste this self-knowledge. One of the most important ways to do this is by evaluating what you deserve when it comes to compensation.
Compensation can mean more than just salary. Paid time off, flexible working hours, or benefits are also part of the package. One of our favorite pieces of advice is a reminder that no one will do this for you, and if you are already working at a company, it usually falls on you to reach out to your manager and bring this topic up. Annual reviews are a great time to discuss compensation or ask about promotions, but if you feel you are being underpaid or overworked, you can bring it up anytime! It’s critical to understand the trajectory of your career - things like what benchmarks or milestones you can expect to achieve, or what level of work you should expect to be promoted. Negotiating with your employer to define this roadmap is beneficial to both parties, as it will help promote job security, and set expectations around productivity and satisfaction.
Expressing your opinion and being heard is validating and empowering. Additionally, it can help you get to know the inner workings of your full compensation package and be confident that you negotiated your must-haves.
Remember that you are at the company because you are providing a valuable service, and you should be compensated accordingly. You have something the company wants. It can feel intimidating, but if you go in with confidence and research, your future self will surely thank you.
This is such a crucial lesson for women, because the gender pay gap is still prevalent in all industries. Breaking things down further, we see that the racial pay gap is amplified when looking at women of color. And unfortunately, if we don't ask for what we deserve, it won't be given to us. If you are at a company that believes in closing this gender and racial pay gap, consider adjusting your ask to account for that. Below are some of the numbers as provided by Ellevest.
As a reminder, the worst that can happen is you are told “no”. However, this is a two-party negotiation process, so you can always ask for a framework and timeline on how to reach the title, flexibility, benefits, or pay you desire. You shouldn’t be left with doubts or feeling less motivated.
If you need more specific advice and tips on how to do this, we recently wrote a blog on Knowing your worth and negotiating well.
3. Education and Investing
There is no amount too small or large when it comes to making your initial investments. The most important thing is to get started! Situations vary person to person, but in general it is a good idea to contribute to a taxable brokerage account for any mid term goals, and to a retirement account, like an employer-sponsored 401k or an Individual Retirement Account (IRA), for your long term goals. Even though many people rely on a financial advisor to execute their investment decisions (which we think is wise), we still believe that understanding the basics around investing is essential.
Why is it so important to understand the basics of investing and financial literacy? Studies show that women invest at a much lower rate than their male counterparts, or let others manage household financial decisions. In a recent JPM Webinar on Women and Retirement we learned that 70% of women who invest take an average or below-average risk. This demonstrates the need to help women become more confident in their financial decision making. Building an educated investment and savings plan will ensure that you are taking the risk necessary to meet your short and long-term goals. Simply mitigating these risks due to lack of confidence is rarely a good strategy, and further perpetuates the overall wealth gap between genders.
Even if getting your hands dirty with financial decisions isn’t immediately appealing, keep in mind that it may be necessary. Data shows that 55% of women live to 85 years or longer, and more frequently outlive their male spouses. This means that it is absolutely necessary for women to have a seat at the table early on, to stay informed and feel comfortable with financial choices. After all, the majority of older women will become primary financial decision-makers. With this being said, there is no surprise that women-controlled wealth is forecasted to double this decade, going from less than a third of investable assets to almost two thirds! Let's make sure this money is invested well and you know the basics.
4. Build a community
It is common to stay quiet about topics we don't know, and finance is definitely one of these. But if there’s one thing we can take from all the writing so far it’s that you need to get curious, speak up, and advocate for yourself. This applies even if speaking up means voicing that you don't know much about a certain topic.
One of Esther Perel's key points at the conference was that, “it's the quality of our relationships that determines the quality of our life.” Money is SUCH a large part of our daily lives, and so we should create a healthy personal relationship with it and then extend that to our community.
When we create a community and environment where we feel supported and can talk about these taboo subjects freely, it fosters growth. You can build your network of allies and mentors to help you talk through some of the big financial decisions in life, like asking for a raise or feeling confident enough to start investing. While we will stress that you should seek professional advice for the investment management portion, it is still important to get educated and make the idea of investing less taboo among our circles.
Work on building the community that you will lean on in times of need. You may find that your own empowerment journey will in turn lift others that you engage with. Start these conversations now, so you can learn and grow with your network and hold each other accountable for savings, investment plans, and other goals around wealth and success.
Improving your relationship with money is possible at all stages, but to do any of it, you have to get started. We provide these 4 tips above to help readers start to feel empowered around their finances, whether it's getting help from a financial advisor in the realm of investing, speaking up and advocating for your salary at work, or destigmatizing ideas around money by engaging in conversations of these topics in your circle of family, friends, and coworkers.
In conclusion, women are still not treated as equals in the financial sector or day to day practices, but there are many of us committed to empowering each other in these spaces.. Time and again, history shows that advancing equity for women benefits everyone in society, not just on a moral and ethical level, but also on an economic level. Empowering yourself is a contagious exercise; by lifting your own confidence and knowledge, you can then share it with other women in your community. These small steps will add up to big changes towards equality in the world at large. As you take on this journey, we hope you will incorporate some of our tips from this post into your practice. Here are a final few questions to keep in mind:
How are you going to use the four tips shared here when faced with financial decisions?
How will you prioritize investing in yourself and well-being through advocacy?
What will you do differently after today?
And what personal commitment will you make?
The possibilities are limitless, and we are here to remind you that you create your own destiny. You are in control of your future. Even better, when we grow together as a community, we will be unstoppable.
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Gloria Stephanie Garcia Cisneros is an Investment Operations Specialist at Mana Financial Life Design (FLD). Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. Allison focuses on the financial planning process, which brings client visions to life through their finances.