This post is relevant for both women and men, but on this year’s International Women’s Day, it is my personal message to all the women reading. Happy International Women’s Day, by the way!
I was challenged by Chelsea at Mama Fish Saves to share some financial advice for women on this important day. Check out the #WomenRockMoney page on her site to find helpful tips from dozens of female financial bloggers and entrepreneurs.
After hemming and hawing about specific tips on budgeting or investing or real estate, I landed on something basic but cross-cutting. My advice is:
EMBRACE THE NUMBERS! It sounds simple, but in my experience it falls into the easier-said-than-done category. Numbers don’t have to be intimidating – they can be empowering.
Before I dive into an explanation of what I mean by embracing the numbers and how I slowly came to do that in my own life, let’s have a quick look at some relevant data.
Women and Numbers
These stats may sound familiar, but they’re important. Women are making great strides in educational achievement and in the labor force, but we are still underrepresented in leadership roles. This is particularly true in number-filled fields. Just 6.4 percent of Fortune 500 companies have female CEOs. Only 13 percent of academic economists in permanent positions and 15 percent of mathematics professors in tenure track positions in the US are women. Women are beginning to participate more in these fields. Women are getting relevant degrees and holding lower-level positions, but we are not selected for leadership roles at nearly the rates men are. Numbers like these can perpetuate the stubborn stereotype that women are not good with numbers.
So if women are not holding leadership posts in fields like finance, economics, or mathematics (or broader STEM fields for that matter), what are the primary fields women are going into jobs these days? Elementary and middle school teacher, nurse, and administrative assistant still top the list of the most common occupations for women, while driver/sales worker, manager, and supervisor top the list for men, according to the Department of Labor. Reading the lists of top occupations for women and men made me feel a little bit like not much has changed in the past few decades in terms of gender norms in the workplace.
And then of course there’s the persistent wage gap, which may be due in part to women still being over-represented in lower paying fields like the ones listed above. Women still earn roughly 83% of what men earn. There is a glimmer of hope here though. At least the wage gap has narrowed for my generation; in 1980 women earned 64% of what men earned, on average. And today, the wage gap is “only” 90 cents on the dollar for employees ages 25-34, an indication that continued progress may be happening.
With this backdrop, chances are many of us women who are working-age today, and who are trying to get our own financial lives in order, grew up surrounded by gender norms that didn’t include women in financial leadership roles in either the personal or the professional realm.
Raised by a Teacher and a Manager
I didn’t start out as a numbers person. Maybe it was always in there somewhere, but it took me a while to find it. I grew up with parents who had pretty gender-standard jobs. My mother was an elementary school teacher, and my father eventually managed his own company in the real estate industry. That’s right – they each fell into one of the three most common occupations for women (elementary school teacher) and men (manager). Though my siblings and I were always encouraged to pursue the careers of our choosing, we can’t deny that our parents’ roles in the workplace and in the home inform our own.
The first time I remember thinking much about finances was when it came time for me to drive. Perhaps I was like many self-absorbed teens who have been lucky enough to have all of their needs provided for them. Figuring out how to get a car was the first time that finances were really going to impact me personally. Actually, I had started thinking about saving for a car in advance since my parents had been clear that I would not be handed one on my 16th birthday (soul crushing, I know). I had been working at my dad’s office before I was old enough to legally get a job at the time (shhh!), and had been saving what literally felt like pennies each month.
When I hit sixteen, I only had a few thousand dollars saved. This was still not enough to buy a used car that met my parents’ safety and reliability standards. It seemed this was by my parents’ design, because my dad took me to the bank to cosign an auto loan for me so I could come up with the rest of the cash for the car. At the time, I perceived this as an outrageous injustice since I was sure my parents could have come up with the small amount I needed to buy the car. Today, this strategy seems brilliant and I may use it with my own kids one day. I began to build credit, learned the value of time and money, and understood firsthand what it meant to have to work to pay a bill each month, albeit a small one.
Somewhere around that time, I remember my dad whipping a handy financial calculator out of his briefcase (yes, I am dating myself – this was definitely pre-smart phones). He tried to explain compound interest to me and told me I should try to buy real estate. I found the compound interest thing intriguing but found the idea of buying real estate before I graduated high school absurd. Like they all say, if only I’d have bought something then…
Spoken Like a True Liberal Arts Major
I went off to a liberal arts college (on scholarship, luckily) and dabbled around in several liberal arts fields before finally getting the college to let me create my own major. Yes, seriously. I did double major in Spanish though, so at least I got that tangible skill out of the bargain! By no means do I discount the value of my liberal arts education. On the contrary. I think it taught me about critical thinking, reading, writing, and being a citizen of the world in a way that a different education may not have.
But numbers?…I had been so scarred by AP calculus in high school that I managed to almost totally avoid numbers all through college. I did take an econ class that I really enjoyed, but at the time I felt that it didn’t come “naturally” to me. I needed a bit of guidance from the professor, which was a feeling I wasn’t accustomed to at the time, so I shied away from digging into that field further.
Embracing the Numbers
Somehow I went from that liberal arts, no numbers person to someone who manages money at work and at home. I’m now someone who geeks out over pivot tables and loves budgets both at home and at work. So how did I go from basically zero to sixty?
Well, it took a decade or so. It began out of necessity, I suppose. During college I had scholarships to cover tuition but not living expenses, and I was determined to graduate with no debt. I had some colleges savings I could draw on as a base, but I also did work-study all through college and lived in lower-cost housing with roommates to save money. I graduated and took a very low-paying fellowship in another country. That was a great learning experience in budgeting and finding low-cost housing in another currency! It was also an illuminating experience to see that so many people live on so, so much less than we do in the U.S. Perspective is key.
That fellowship was followed by two more low-paying jobs. I remember walking to buy a slice of pizza for dinner for a few bucks, and thinking that was a treat. Even when I got higher paying jobs, my furniture still came from Craigslist, and I still thought thrifting was cool. (I’m still a bit obsessed with it, to be honest – it’s kind of a problem – another post about that later!)
After a few years of feeling poor despite having a college degree, I went back for more education. My graduate program required a lot of economics courses, even though that wasn’t my core focus, and it turned out that I really liked them! I used those quantitative skills in the professional world when I left, and they have served me well. Upon graduating with my master’s degree though, I had to take a job paying less than what I was making went in went into the program. Talk about disillusionment – that was it. I credit that experience for helping me learn not to take a good salary for granted.
Little by little, I began to embrace the numbers. At work, I embraced the numbers and landed myself a few back-to-back promotions by performing solid financial analysis. I created key reference spreadsheets and tracking systems, and become a point person in critical financial areas. I found colleagues whom I could learn from and others whom I could mentor. I seriously chat with coworkers about spreadsheet formatting – I am a huge nerd, yes. And guess what? Most of those coworkers are women too. They embrace the numbers, and they excel at it! And they do make the prettiest (aka easiest to read) spreadsheets.
Honestly, I think working with numbers professionally helped give me the interest and the confidence to focus more on my financial future. Creating beautiful spreadsheets for my job made me want to do something similar at home. I started taking concrete steps toward a more intentional financial plan. I increased my deduction to my pre-tax retirement savings account gradually over time. I also contributed to a Roth IRA. I developed an emergency savings fund that I’ve had to rely on a few times. I made sure to fully pay off my credit cards each month and maintain a good credit score. Nothing out of the ordinary. Just all the seemingly mundane but important work of steadily building a solid financial foundation.
And then I got married. My husband hadn’t embraced the numbers as much as I had, I think it’s fair to say. We worked together to set goals and stick to them. We had a few good years of really good saving before the kids came and made everything more expensive!
How to Get Started
If you think you’re not a numbers person, think again. Maybe you just haven’t given yourself the time or the confidence to focus on your finances.
If you think you’re not good with money, give yourself some credit. Focus on the little pieces you have exercised control over. And set up systems to help you. Check out Episode 687 of The So Money Podcast where early retiree Tanja Hester talks about using systems to overcome her feeling that she wasn’t good with money.
Start tracking. Spend a few months tracking every penny you spend. I currently use Mint for this. Many bloggers recommend Personal Capital (they often get paid a little if you sign up). I haven’t tried tools other than Mint yet, though I might soon. Pick a tool that works for you – maybe even a good old-fashioned notebook or an e-notebook on your phone. See where your money goes.
Then set some basic budgets. The first line item should be savings. Have it taken out of your paycheck up front. This is not new advice, but it’s good advice. Your spending budgets don’t have to be super specific unless that helps you. Or unless you’re a budget nerd like me – I like fairly specific budgets because it gives me clear targets.
Make sure you’re putting tax-advantaged retirement savings options to work for you. Do a bit of research on what makes the most sense for your situation.
Talk to people. Friends, family, coworkers. Read some personal finance blogs, of course!
Mainly, just start. Find some numbers you like looking at or working with on a regular basis. Start there, and then expand to a new set of numbers or personal finance area when you’re ready. You don’t have to tackle budgeting, saving, investing, life insurance, mortgage amortization tables, and estate planning all in one go. Bite off a piece that feels manageable and embrace those numbers first. You may find, like I did, that once you conquer one set of numbers, it’s kind of an addictive hobby. Before you know it, you may be one of those women who can’t resist a good spreadsheet!
Have fun! Embrace those numbers! And again, Happy International Women’s Day!
Inspired? Have your own financial tip to share? Share a way you will improve your own financial position this year with the hashtag #WomenRockMoney!