We’re going to cover the essential money skills you need as women. But before we do, we need to get clear why it is so important for you?
Well, if you’re looking to build the life you love for yourself and family, then chances are you will want to have more money than now.
Not because you love money, but so you can have…
more security and comfort,
and give more to the things you care most about.
This doesn’t happen overnight – but it does happen. It happens is you savvy and switched on about money. It happens if you build your financial IQ.
So, to get you started here are 40 skills you should be looking to build to improve your financial future.
Saving Money Skills For Women
- Think big and save more – If you feel that saving is just for emergencies, you’ll probably save enough money to cover only your emergency fund. When we consider the big picture (a.k.a the future, retirement, our kids, etc.), we tend to save even more. Just categorise your savings into what you want to save for, and you’ll never stop saving (examples: Savings for Emergency Fund / Savings for Retirement / Savings for Kid’s Tuition / Savings for that Trip to Paris).
- Budgeting – Budgeting is tracking every single expense and income, and then analysing it rationally to create (usually) a monthly plan. Is like when you go to the mall and focus on buying only the things you need. A nice and controlled way to budget is to use the envelope cash system, and if you have your own business, the zero-sum income might be great.
- Teach budgeting to your kids – How awesome would it be if our parents had taught us how to budget? I assure you I wouldn’t have spent too much money on makeup as a teen. This is a skill for life, so you can learn how to budget and practice it along with the kids!
- If you can’t budget, make a commitment to saving – Budgeting is an essential skill if you want and can do it. But sometimes we become tired of doing it every single month. If you can’t or feel like you’re already a master in budgeting, just put the amount of money you want to save on your savings account as soon as you get the paycheck.
- Find out how much to save – This is as important as setting up a budget and as buying clothes only if you need them. There are many ways to calculate how much you should save, but I recommend this simple formula: Net Savings / Total Income = Personal Savings Rate.
- Save on the supermarket – There are places where we think it’s inevitable to spend a lot, like the supermarket. But simple things like buying products on the higher and lower shelves or making a groceries list saves a lot of money in the long run.
- Automate your finances – If you hate the process of paying your bills, investing for your retirement and getting your money from your regular account to your savings account every month, you can just automate everything! This way, you won’t have any excuses to go to a shopping spree because you have some “extra money”. This money will be committed.
- Keep focused – Don’t give up, girl! Frugal fatigue is inevitable after months of saving, but there are many things you can do to keep focused. First, remember how strong you are for doing this, and celebrates small wins with your friends and family by doing low-cost cultural activities, for example. Essential skills if you want to improve your money management and skills.
- Save with clothes – Clothes are usually our worst enemies when it comes to money, but you can turn them into friends! On the next spring cleaning (or even today), take a look at your wardrobe and check which clothes you haven’t used in two months. These ones can be sold and earn you some extra cash.
- Sell useless gadgets – The same as in the clothes – you probably have a camera you don’t use because your smartphone camera is enough, right?
Spending Money Skills For Women
- Planning before spending – Repeat this mantra every time you look at that gorgeous new iPhone or just whenever you fall in love with a dress. If you want that, earn that. Plan weeks ahead and save enough money to buy the things you want.
- Don’t buy by impulse – If you have a slight interest in marketing, you know they can manipulate our brains into buying by impulse. I want you to be smarter than them, and to do that, you can learn techniques to restrain impulse spending.
- Research your purchases – This is a great skill that can be developed along with the “planning before spending” one. During the time you plan, you can research cheaper ways to get what you want. If the item is pricy, spend more time researching it.
- Negotiation – This amazing skill can save you thousands. I imagine I’m in a competition with the seller, and that they are trying to trick me into paying more than I should. When I do that, I tend to research beforehand, print the lower price I found and show this price to another store’s manager.
- Replace one brand for another – Have you realised that all makeup is the same thing with only different packages? Sure, some are too distant in quality, but most of the good ones look the same when we apply, even when they are super different in price. The same with food, cleaning products, clothes…
- Learn to live with only the necessary – Have you been in a money emergency? If you did, you know what it’s like, but if you haven’t… Start practising. Take a week to see what you would do without money or with little budget. This can motivate you to stick to your plans and even start saving more for an emergency fund. A great money skill to build up!
- Borrow before Buying – Borrowing is the best thing ever! It’s something that takes you closer to your friends and family, while also saving you a lot of money. Borrow items, tools and even clothes you will only use once. If you are low on cash and have a baby, well, babies grow fast, so it’s better to borrow. But don’t forget about the golden rules of borrowing.
- Identify a counterfeit bill – This is a must, but I bet you’ve never thought of that. Here’s an article that helps.
- Learn how to rent an apartment – Renting an apartment is a big deal – you should think of a lot of things from renter’s insurance to co-signing or breaking a lease to a security deposit. The good thing about it is that it’s a great way to learn the basics before buying a house.
- Learn how to buy a house – This is not for everyone, maybe you don’t want to do it. But if you do, it’s important to be aware of the numerous steps it takes.
Credit & Debt Skills For Women
- Know your rights – When it comes to credit and debit skills, the top one is to know your rights. You can find them online, and they vary with the country. We have some in the UK like the Section 75 of the Consumer Credit Act, the Consumer rights: payment surcharges, and this fantastic Consumer Guide.
- Check your credit card statement every week – This is a must, and I know you fear it. I used to freak out and check my statement because I knew I bought stuff I didn’t need. But we must face this fear so that our budget matches the money we have available and our expectations.
- Ask your bank for a better interest rate – Banks are companies just like any other. That negotiation skill won’t serve you only when you want to buy a gorgeous dress for the lowest price possible, it also works when you ask your bank for a better interest rate. Threat them to change to another bank that gives you what you want – they hate to lose a customer.
- Know what a credit report is – The credit report is a must-know. Companies keep a file with your name and a report of all the money you have borrowed to other companies. This article gives you the names of these companies and clarifies the subject. If you don’t know this, you should look to improve your money skills and knowledge.
- Check your credit score consistently – Your credit score tells you if you are a person who pays their debts on time. It is essential to check it always (and you can do it for free 3x a year with the waterfall method). The score says if the bank will give you a lower interest rate if you can rent that apartment or open your dream business with credit.
- Contact companies to fix errors in your credit report – If you pay everything on time and have no debts. And your score is still low, then you should investigate. Maybe you have a cloned credit card, or it’s perhaps just a mistake. Either way, you should know how to dispute errors on your credit report.
- Keep your score positive – Keeping a positive score is a fantastic way to get credit. You can do that by paying your bills on time, especially your credit card debt if you have one. It’s like keeping a house clean: as long as we keep it free of clutter, it looks great, but when things start to go wrong, everything goes wrong.
- Improve your credit score – You can do that by paying your bills ahead of time, getting out of debt, and more. Here are some tips of Experian, one of the companies that tell you the score.
- Know who to borrow money from – Actually, here at this blog we prefer that you lend your precious money rather than borrowing, but if you have to do it, you should know that there are many ways, but some are better than others depending on your situation. Do you want it fast? You’ll be able to pay it soon? You can borrow from the bank, from P2P lending, and from many other sources.
- Develop a plan to crush your debt – Are you in debt? You can get out of there soon if you develop a plan to crush it. First, you should focus on one debt at a time. Usually, I recommend people to defeat the smaller ones first and then the ones that have a higher interest rate. Here is a great action plan to pay down your debt.
Investing Skills For Women
- Know Investment 101 – We don’t need to be experts in investing, knowing just the basics might be enough. Maybe you don’t know how to apply professional makeup. But with your practice, I’m sure you know a few things, right? We start slow in investing, and then we get more interested.
- Learn the Psychology of Trading – You have to check these articles. They are like a first date with trading, where you can see the pros and cons. Psychology is one of the essential money skills all women need.
- Journaling – This skill has proven me to be one of the best ones.
Keeping a trading journal is like keeping a diary – you get to see better what you did right and what you did wrong. I recommend that you start doing that from day 1!
- Prioritise your investments – Investments are your way out of debt and into building your own future. You’ll feel what it’s like to lend and not to borrow for once. That is why it’s essential to prioritise your investments – whether you want to build an emergency fund or save for retirement.
- Learn about the importance of compound interest – I must say I’m sorry to all my girlfriends, but compound interest is my best friend forever. This magical thing in the investment world will turn the few thousand dollars in my retirement fund into a fortune! When you learn about the importance of compound interest, you’ll know everything to love about it.
- Learn risk management – Usually, we do that after we lose money, because we, girls, think we are invincible. I still think that, but I’ve learnt my share of financial risk management (have in mind that the market is unpredictable, and sometimes it’s a girl). Risk management is a skill all women should have to improve their financial risk.
- Open a brokerage account – This is the most essential thing you should do when entering the realm of investing. It may seem hard, but it’s not, and you’ll get the hang of it. This post teaches you the basics on how to open a brokerage account, and in here I give you some options of stock market brokers.
- Understand the different asset classes – The investing and trading part is tricky because there are many types of asset classes. You can start by investing so that you understand how the stock market works. By doing that you’ll learn some basic asset classes like stocks, investments, and cryptocurrency.
- Choose a few asset classes to diversify – Once you’re settled and understands all the classes, you can diversify your wallet. A great way to do that is by using the modern portfolio theory. It’s like combining ice-cream flavours for the ultimate final result.
- Buy a Government Bond – A nice way to start investing is by buying government bonds. In the UK, you buy a bond at a fixed rate and the government will pay you the interests annually. When the maturity date arrives, you’ll get all the money you had invested in the first place. You can find more info in here.