How money confidence can help women to unlock their financial potential
- The financial power of women is growing.
- However, confidence and self-esteem can be stumbling blocks when it comes to finances, according to research.
- Financial advice and a long-term financial plan can help to boost self-assurance when making decisions about savings, pensions and investments.
When we talk about women and wealth the conversation tends to be about one particular theme - yet it’s not the full picture.
It’s well established that women face barriers when it comes to gaining financial parity with men, given gender inequality in pay, the workplace, pensions and other areas. It’s a challenge that has been made harder by the economic effects of the coronavirus pandemic, which have had a disproportionate impact on women.
However, we also know that women are gaining financial power at a faster rate than any other group and their assets are growing rapidly.
The wealth held by women globally is expected to grow to $93 trillion [1] by 2023, up from $77 trillion in early 20202 [2]. Currently, about a third of the world’s wealth is in the hands of women [1]. Catalyst.org estimates that 67% of all UK household consumption is controlled or influenced by women and this figure rises even higher when you break it down by types of purchases such as cars, holidays and homes [3].
The confidence gap
So how can this be built upon and translated into something that makes a real difference to the lives of women?
Success and happiness are often based on male ideas of what they mean. For 47% of UK women, wealth means health and happiness, followed by financial security and work-life balance, according to a report by the WealthiHer Network2. While men tend to think about wealth in terms of achievements and how they live their life, for women it’s more about a sense of greater wellbeing. The latter can be harder to measure, however.
“For many women success is also about freedom of choice and making a difference, but that requires being able to manage your money,” says Sharon Bonfield, Propositions Manager at St. James's Place Wealth Management. “You might earn well but if you don’t manage it well you may feel unsuccessful.” In other words, women may be more financially powerful or more affluent than ever before, but they don’t necessarily feel it.
This partly reflects itself in some women’s low self-esteem. Men are twice as likely to have high self-esteem as women, according to the WealthiHer report2. “There is a link between self-esteem and financial autonomy,” Bonfield points out. “Women hold back from investing because they think they don’t know enough about it or they don’t know it’s an option for them. The result is that their markers for success may not be attainable.”
The WealthiHer Report also measured men’s and women’s confidence, especially when it comes to financial matters. It found that just 39% of women in the UK consider themselves ‘above average’ when it comes to everyday financial confidence, compared with 57% of their male counterparts. This extends to long-term investing, too, with women twice as likely as men to rate themselves as having low confidence.
Time to talk
It’s never too late to start and to start to learn how your money can translate into something meaningful for you and how you live your life, whatever your goals and aspirations.
It may begin with a simple conversation, according to Bonfield. “The lack of confidence around finances means women don’t feel comfortable speaking about money to anyone. But don’t be embarrassed – turn it into something that’s relevant to your long-term happiness and security."
“Ask your friends what they’re doing. Do they have a pension? Do they invest? Even just starting to have those conversations is half the work.” It may even be easier to start this conversation with someone you build a new relationship with, like a financial adviser - being one step removed from you personally could be how you unlock/release your confidence. Find the right path for you - the important part is taking that step towards it."
A St. James’s Place adviser will take the time to help you to understand how to manage your money so that you feel as successful as you really are. They can explain to you how to manage your money in the context of your personal and family lifetime goals. When it comes to going further, making your money work harder for you and putting a long-term financial plan together, professional advice may be the key that opens the door to success.
Looking for a trusted adviser to help you with your finances? Talk to a St. James’s Place Partner today.
Footnotes
[1] Women in Wealth: Managing the Next Decade of Women’s Wealth, Boston Consulting Group 2020 (April 2020)
[2] The Changing Faces of Women’s Wealth, WealthiHer Network, 2021, total number surveyed 2239
[3] Catalyst.org, May 2018
