The 2 simple behaviour shifts that could change women’s relationship with money

Provided by Kellands Chartered Financial Planners, Premium Sponsors of the IWD Lunch 2024

Money is part and parcel of almost everything we do in our lives, so it makes sense to have a positive relationship with it.

However, life events can affect our relationship with money – from the way we’re brought up, to the types of career we choose, to unexpected changes like breakups and relocations. And sadly, having a poor relationship with money could lead to cycles of “bad debt”, low spending discipline, or simply being financially unprepared for when something goes wrong.

Although these negative financial behaviours can afflict anyone, if you are a woman, the importance of forming a positive relationship with money cannot be overstated. Women in the UK often face financial inequality that could impede future stability.

So, in celebration of the recent International Women’s Day on 8 March, let’s look at two simple behavioural shifts that could transform women’s relationship with money.

1. Get curious about finance

If learning more about money sounds uninteresting to you, you are not alone. Overall, the UK falls short on financial literacy, according to several pieces of recent research.

One study conducted by Wealthify for the Centre for Economics and Business Research (CEBR) found that only 5% of Brits could answer 10 questions about frequently discussed financial topics correctly.

Plus, for women, there appears to be even lower financial literacy than men. A study by the Money & Pensions Service, published in their UK Strategy for Financial Wellbeing report, found that only 36% of women said they know enough about pensions to make retirement decisions, compared to 54% of men.

Low financial literacy could lead you to feel lost and defeated when it comes to money, perpetuating bad habits and creating negative associations.

If that sounds like you, it could be worth getting back to basics and boosting your knowledge. You could:

• Take a financial literacy course with a qualified professional
• Pay greater attention to financial news from reputable sources rather than social media
• Involve your friends and family in your learning so you can improve your literacy skills together
• Work with a financial planner over the long term.

Each of these steps could help you to feel empowered and confident in your financial choices, helping to break any negative patterns you have formed.

2. Write your goals down and say them out loud

You might have seen words and phrases like “manifesting” and “speaking it into existence” floating around the internet in recent years.

Whether or not you are someone who believes in the power of manifestation, studies show that being loud about your goals could really help. And, when it comes to money matters, penning specific objectives could help to create a positive association with your finances.

Trying out the practice of writing down and speaking clearly about your financial goals could:

• Change your mindset from “I wish I could” to “I will”
• Motivate you to take action when it comes to your wealth, rather than feeling as if you are in the passenger seat
• Inspire you to read, research, and speak to professionals about how to improve your financial situation.

For some people, especially if you are a woman who feels lost when it comes to finance, the act of even setting a money goal is challenging. You could be wondering: “How can I set financial objectives if I don’t even know where to begin?”

Here is how to kick off your goal-oriented financial journey.

Write down your 3 main goals for the next 10 years

This could be to buy your first home, pursue your dream job, or have an unforgettable travel experience. Whatever your goals, put them at the top of a whiteboard or pin them to your desktop, so they are always situated at the front of your mind.

Look at your current financial behaviours carefully

Are you a thrifty spender, or do you tend to splurge on things you don’t need? Examining your financial behaviours carefully, and being honest about the things you need to improve, could help you to remedy any negative patterns with a view of pursuing the all-important goals you have set.

After you’ve done this, think about how your money could serve these aspirations. If you’re not sure where to begin, here are three foundational elements to focus on:

• Cash savings. If you were to lose your job, or need to take time off for another reason, could your savings support you for between 1 and 3 months? If not, think about creating a little-but-often savings plan that boosts your cash buffer in case you need it. If you already have enough savings in place for an emergency, begin thinking about creating a surplus that could help to fund the goals you have decided upon.
• Investing is one of the cornerstones of long-term financial wellbeing in today’s world, because it often helps individuals to grow their money in line with inflation. On the other hand, keeping all your money in cash could erode its value over time. If you are new to investing, speaking to a financial planner about how to get started may help. For those with an existing portfolio, ensure it is diverse, and remember not to panic-sell if your investments dip – your holdings should ideally be kept for a minimum of five years.
• Even if you are only in your 20s or 30s, that doesn’t mean you do not need key financial protection such as life insurance or critical illness cover. Policies can start from around £5 a month, and having protection in place could significantly benefit you or your loved ones if the unthinkable happens. That way, if you hit a bump in the road, you can cope more easily without having to sacrifice your aspirations.

These three fundamentals could help you to put your goals into action while keeping your finances secure and stable for the long term.

Need help rejuvenating your relationship with money? Financial planning could help

If you feel that your relationship with money is stuck in a cycle of negativity, working with a financial planner could help you break free.

Whether you are a woman struggling with the particular aspects we’ve discussed in today’s blog, or you simply relate to the feeling of being financially lost, financial planning could allow you to approach your money with structure, knowledge, and confidence at the centre of what you do.

It doesn’t matter if you are just starting your career or are almost at retirement – financial planning could be valuable to anyone at any life stage.

To talk to an expert about long-term financial planning, contact a Kellands financial planner at [email protected], or call 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.