Seven things women need to know about money

This article is part of the Financial Literacy and Inclusion Campaign.

Millions of people around the world have been told to think about their safety net, examine their spending and start investing because of the Pandemic.

The narrative about women and money is depressing as we approach International Women's Day.

We live for longer, spend more of our lives caring for others, and all of this negatively affects our finances, as the gender pay gap has widened.

The cost of living crisis is adding to our problems, with inflation eating away at cash savings, and volatility returning to global stock markets.

I worry that focusing on the negatives is a further barrier to engagement, as I have been writing about finance for more than 20 years. Should we bother if the financial odds are against women?

I want to give you some ideas about money that could change your mind. There is a practical lesson that women everywhere can take away from the seven areas below.

Thanks to the Financial Literacy and Inclusion Campaign, this article is free to read and share, so if you are inspired by the expert suggestions below, please pass them on.

1. What financial independence feels like

I wish we could bottle the feeling that financial independence gives you.

I would define this as moving from feeling overwhelmed by money to feeling more in control, making your own decisions, setting financial priorities, and developing effective habits like budgeting to help you achieve your goals.

Traditional goals set by older generations like buying a home are not affordable for younger people.

Financial independence is something for the app's users. The topics younger women want to learn about are investing, negotiating a pay rise, and starting a business, and they want to learn from each other's experiences.

The element of community is so empowering.

Many people shared their financial fears and experiences online during the Pandemic. Women can find role models that the traditional financial world doesn't offer on social media.

Real-life stories remind us that nobody is perfect. The huge growth of the online debt-free community has shown that knowing that others are going through the same challenges can be a source of strength and inspiration. It reminds us that we shouldn't confuse financial independence with financial privilege.

Mrs Moneypenny started a thread on the social networking site in February asking if we were a bit more honest about how we paid for our first homes.

Thousands of people said they only achieved this milestone by coming into an inheritance, receiving gifts or loans from their parents, or having a higher earning partner, as opposed to cancelling Netflix and their gym membership.

2. More women are investing — and so can you

Investment platforms and trading apps reported a new wave of female customers. Getting started is easy. As markets turn choppy, it's a good idea to think about your investment strategy and understand how tax breaks can boost your investments.

Charlotte Ransom says the challenge is getting people closer to their money.

Women tend to have higher cash holdings than men, so rising inflation is going to hit them harder.

She believes that women find it harder to engage with the personal finance industry because they hold so much cash.

She believes that setting long-term goals such as a target income to aim for in retirement is more powerful than buying a product.

How can you get closer to your money? At an International Women's Day event a few years ago, I asked women if they had money in the stock market. I asked people if they had a company pension. The nature of money invested in company schemes meant most had failed to connect.

Investing is one of the hottest topics, yet our users don't want to talk about pensions.

A lack of money is the main reason more women don't invest.

Annamaria Lusardi, founder of the global financial literacy centre at George Washington University, saysIgnorance in finance is not bliss.

3. What does your partner earn — and where is the money?

A surprising number of women don't know the answer to this question. Have a conversation with your peers before you have a conversation with your partner.

"In a similar way to a book club, why not meet your friends over dinner to start a conversation about financial topics?" suggestsPatricia Astley, managing director at Julius Baer.

She and her friends went around the table sharing their knowledge of pensions, life insurance and wills.

She says that 42 per cent of marriages end in divorce in the UK. We need to have these conversations now.

One member of my book club is looking into her partner's financial affairs because of the Pandemic.

If you were to die of Covid tomorrow, where is our money, the passwords, the financial records for our business and the house? Talking about money has become a bigger part of their lives.

Jane Portas, a financial expert and creator of the Six Moment that Matter website, asks women if they know the value of their pension pot relative to their partner.

She says that without a conscious effort to maintain and level up finances, these gaps start to build.

Don't try to have all of these conversations at the same time, tackling one topic at a time should make it more enjoyable.

4. The financial impact of having a baby

Financial planning can help reduce the damage done to women's earnings after they become a parent.

The founder of the My Bump Pay website suggests couples start planning for a family way before they start.

She says that the most important thing is to find out what both parents are entitled to in terms of maternity pay and parental leave.

Some employers offer more enhanced packages than others, according to the directory on her website. Men want to play a bigger role in the early years. In the UK, shared parental leave is becoming more common, but not every company offers it.

It's important for families to know how their pay will be affected. Maternity pay can drop to zero.

She says to ask your employer for a schedule of payments ahead of time so you can see how much maternity pay you will get.

The gender pensions gap is worse because so many women discover they can't afford to keep up pension contributions.

The biggest financial challenge is still to come, and that is the cost of child care.

5. Flexible working is not just for women

In the City of London, high-profile female bosses have been encouraging women to come back to work.

If flexible working is something that only women are asking for, it could damage their pay and career prospects. They stopped short of suggesting that more men should work flexible hours.

Men and women can benefit from the fact that the stigma around flexible working has been pushed aside. These conversations need to be had at home now that that has been eliminated.

Charlotte Jessop encourages couples to look at their finances.

When our children were small, my partner and I looked into how our take home pay would be affected if we both went part time. If they cut their working hours by 50 per cent, they would still be able to keep 70 per cent of their income.

Reducing their take home pay moved the couple into lower tax bands, and they ended up spending less on child care as one parent was usually at home.

Other couples could find that this approach could boost their entitlement to child benefit or qualify them for up to 30 hours per week of free child care.

6. How to hustle

The need for more flexibility has been a driver for women to start businesses. Statistics show that female-owned enterprises often struggle to scale up, attracting a small amount of money from outside investors.

According to Atomico's research, just 1.1 per cent of funding went to female-led technology companies in the year 2021. It estimated that only 12 per cent of European venture capital general partners and managing directors were female.

The training course for women to learn how to present more confidently to VC investors was taken by the founders of Your Juno.

They were told that because men bidding for funding typically oversell themselves, investors expect them to put on a show.

Of course we questioned why we had to change our technique to fit around the mindset of male investors. The sisters raised over two million dollars in seed funding last week.

Although women only account for one in 20 people who approach him seeking an investment, his strike rate for investing in female is very high. Why?

I think many women don't always believe in themselves enough because men think they're great, and some of them are.

He thinks backing female entrepreneurs gives him a better chance of success.

I can back it up with science now that it is a generalisation. I can only tell you about my experience. If you're a woman, don't just think about going to women's groups. Many men want to invest in female businesses.

7. How to maximise your earnings potential

Side hustles can provide a valuable extra income, and possibly an avenue to develop your next career, but are you being paid fairly in your main hustle?

Lusardi accepts that part of the problem is that women are less likely to ask for an increase than men.

She says if negotiations don't go your way, the best way to increase your salary is to move jobs.

Women are more likely to work part time. After having children, many women switch to a four-day week in order to get a 20 percent pay cut.

Women sacrifice flexibility for pay and career progression when they stay in the same job for a long time after having children.

Post-pandemic job ads show the new hybrid working, making it easier to talk about flexibility with a potential employer.

In the future, the conversation is going to be about flexible careers. People in their 50s and 60s are going to need to reskill as we live for longer. It could be that moving jobs are about accessing other opportunities.

The transition from work to retirement will be difficult because of the steep rise in women's state pension age.

If you don't work because you care for your family, try to stay employed.

She encourages women to be vocal about their money issues, whether that is asking for help, sharing experiences or campaigning for change.

Lusardi says that women are 50 percent of the population. International Women's Day is needed to remind men of these things.

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