Anne lives in an upper-middle-class neighborhood on the East Coast. She is a senior researcher at a leading STEM institution, and financially, she is secure: she easily pays her rent, never worries about putting food on the table, and affords the finer things in life. However, beneath this veneer of success, she struggles with financial confidence.
Anne hesitates to take bold financial steps and avoids even asking questions about managing her money because she doesn’t want to appear naive. Investing in mutual funds or stocks feels overwhelming. She doesn’t have a clear strategy for retirement, and she’s not fully aware of how much she should be saving.
Anne recognizes that her challenges are part of a larger societal pattern that fails to empower women with the knowledge and confidence to manage their finances effectively. She is determined to learn the necessary steps to achieve true independence, but she currently lacks direction.
Anne’s situation is more common than you might think. Recent Bank of America research finds that while 94% of women believe they will be personally responsible for their finances at some point in their adult lives, only about half (48%) currently feel confident about their finances, and only 28% feel empowered to take action. Yet, women make over 80 percent of purchases, and they will control 66 percent of consumer wealth in the next decade.
While many women scientists earn good salaries, they often let someone else take care of their personal finances. Now more than ever, they need to be more knowledgeable: pensions and Public Employee Retirement Systems (PERS) are disappearing, 401(k) plans require contributors to manage their own funds, and entrepreneurs and workers in non-traditional fields must take charge of creating their own retirement programs.
Fortunately, you can now easily access all kinds of information about finances, and some of the best of it comes from women dedicated to helping you become financially literate. To become an active participant, you need to learn the lingo, start communicating about money matters, learn how to budget, make a plan for increasing your savings and managing your debt, and change your anxious mindset about money.
First of all, learning financial lingo is just like learning any language. Once you know the terms, a whole new world opens up! Podcasts, books, and classes abound, and good financial websites helpfully define most financial terms. Banks regularly hold online courses or offer information to help you become financially literate.
Talking about money often seems taboo in American culture but should not be. Practice talking to other women about finances, and you will immediately find common ground. You can start by asking simple questions about emergency funds: Do you have one? How much do you think we should set aside for emergencies? Where should we keep these funds? Include money talk (and vocabulary) in everyday conversations with your partner too.
Next, review your budget. Schedule an annual meeting with yourself, your partner or a financial adviser to examine your financial position, and make a plan for next year. Also consider creating a plan based on where you want to be in ten years. Remember that the web provides many tools for budgeting, and often your bank or credit card provider can do that work for you. Carve out time each week or month to fine-tune your budget.
Then, look for ways to increase your savings for emergency, mid-term, and retirement needs. Tori Dunlap, founder of Her First $100K, says to put three months of expenses in a high-yield savings account for your emergency savings. Mid-term savings consist of money you put aside for that new washer-dryer combo, a vacation, a car, or a graduate school program. Consider putting this money into an accessible investment account separate from your emergency and day-to-day bank accounts. You can set aside long-term, retirement savings in a 401(k) or individual retirement account (IRA). Talk to friends, colleagues, and family about their investment philosophies but know that you need to develop one that works for you!
Saving money goes hand in hand with managing debt. Be sure to pay off your credit cards each month to prevent interest from accumulating. Personal debt is not necessarily bad, but unmanaged debt is problematic and expensive!
Finally, change your overall mindset about money. Society still teaches us that women lack financial skills, but we must debunk this myth. Whenever you feel tempted to leave the planning to your partner or to tell yourself that your finances “will all just work out,” challenge that view. Motivate yourself to think differently and to get fully engaged with your finances. Think of this as similar to starting an exercise routine: you may struggle at first, but you will soon find that your financial planning becomes second nature and even pleasurable. Being an active participant in these decisions allows you to watch your future brighten as you take control and build your wealth.
Meleah Ashford is a water resources engineer with a BS from Oregon State University and an MS from the University of California, Berkeley. She worked in industry for 30 years, mostly as an engineering consultant. Ashford is now a certified Life Coach with Find Solid Ground Coaching, where she helps people meet goals related to financial well-being, starting a business, living the life they desire, and flourishing as a woman in STEM.
Megha Lal (she/her) is a postdoctoral scholar and Co-chair of the Postdoctoral Alliance at Children’s Hospital of Philadelphia. She is the project manager at STEMPeers Gurukool and is a member of the STEMPeers Leadership team.
This article was originally published in AWIS Magazine. Join AWIS to access the full issue of AWIS Magazine and more member benefits.