I am passionate about empowering women to be financially independent. Taking control of your money and financial affairs means relying on nobody – and I think that’s a goal all women should aspire to. Here are my six suggestions for 2023 New Year’s resolutions that will change your life!
There’s no doubt that as women we face huge financial challenges compared to our male counterparts. On average, women globally are paid about 20% less than men with a high percentage in low-paid, part-time and/or ‘vulnerable’ jobs.
Then there’s the ‘motherhood pay gap’, which penalises women financially for taking maternity leave and changing careers to jobs that allow them to balance a family with work.
All this makes saving, retirement and gaining financial independence more difficult for women than it is for men.
Nevertheless, progress is being made. Traditional gender roles are diminishing, albeit more slowly than some of us would like, and women have never been better qualified, outnumbering men in higher education around the world.
With women’s wealth and incomes growing faster than ever before, we owe it to ourselves to ensure that we are managing our money wisely and building wealth to secure our financial independence now and over the long term.
As we approach 2023, here are some New Year’s resolutions ideas that will empower you to do just that.
Take responsibility for your own money
Never rely on a partner to manage your financial affairs. They can be as unpredictable as life itself so it’s essential to take responsibility for your own money. A bank account in your sole name is a must. Make sure you have a working knowledge of how your household finances work, even if you’re not the one managing them. If you have no clue about monthly income and expenditure in your home, that’s where you should start in 2023.
Have a financial plan
You’ll also need a bespoke financial plan tailored to your needs. Ideally, it should build wealth with pension planning, investments and savings, and protect your savings with life insurance, critical illness cover and estate planning.
If you don’t already have a long-term plan in place, make that a priority in 2023, irrespective of your income level. If you’re not sure where to start, it’s time to seek professional help from a female-friendly adviser.
Educate yourself and stay informed about financial affairs
A 2016 report from Britain Thinks found that women invest less than men, lack confidence in investing and view the stock market as ‘not for them’. Much of this is driven by them feeling less knowledgeable, with the masculine language surrounding financial products a major turnoff.
But let’s be clear, women are just as capable as men of understanding financial planning concepts. In fact, studies show that female investors have a slight edge over their male counterparts.
That doesn’t mean that you have to immerse yourself in financial affairs. Most women have neither the time nor inclination for that, but you should know about investing basics – how interest rates work, compounding, and the theory of risk and return.
Understanding these concepts will allow you to make better decisions about your money.
Make provision for your retirement
The gender pension gap is estimated at 30-40% across the globe. Yet on average women have longer retirements, during which they spend more time living alone and spend more on healthcare. It’s key that you have a financial plan for retirement.
If you work in Hong Kong, you will have a Mandatory Provident Fund (MPF) but this is unlikely to be sufficient to meet your retirement needs. Don’t be one of the 46% of Hong Kong women worried about being financially unprepared for retirement, make 2023 the year that you start saving into a private pension fund.
I have supported many expatriate women seeking to put retirement provision in place. If tending to your pension is your resolution in 2023 let me help you work out exactly how much you need to save and find the best investment solutions for you.
Manage your risk
Women are known to be more risk-averse than men and this is reflected in their attitudes to saving. Women are far more likely to opt for low-growth savings accounts over investment funds. When they do invest in funds, they tend to favour low-risk conservative investments over more aggressive, growth-targeted funds, regardless of their actual risk tolerance.
In 2023, resolve to make your money work as hard as it can for you by taking a level of risk that matches your circumstances. I conduct a detailed financial needs analysis with all my clients and this includes sophisticated risk profiling. This enables them to confidently select funds aligned with their tolerance to risk to achieve their long-term goals in the shortest possible time frame.
The investment opportunities that are best for you will depend on your personal circumstances. There is no one-size-fits-all answer. Your choices will depend on where you are from and what your future intentions are. Expatriates have access to a wider range of investment choices than they would back home, but it is not always easy to choose the most appropriate ones.
Take control of your money and financial affairs in 2023 by choosing one or more of these resolutions to start working towards a more secure financial future.
If you would like professional advice and support on your journey to financial independence, contact me for a free, no-obligation consultation.