Good news: The economic power of women is on the rise in this country, and it’s one of the most significant financial shifts in recent decades. Women have more financial influence and are managing more wealth than ever before—approximately $20 trillion of U.S. household financial assets. Women now make the majority of consumer spending decisions,1they are working to close the gender pay gap,2and, according toFidelity Investments’ 2021 Women and InvestingStudy, they consistently deliver higher returns on investments than their male counterparts.
But here’s the problem: Many women still simply don’t make investing a priority. They tend to have less money in their financial accounts and trade 45% less frequently than men.3And as a result, they aren’t accumulating wealth as effectively.To end that cycle and take control of their financial futures, women need to learn how to better build their wealth. And they need to start now.
Still, as tempting as it might be to believe any of the get-rich-quick schemes floating around on the internet, remember that building wealth isn’t a sprint to the finish line. It’s a marathon that requires careful planning and patience. Mostsuccessful investors make their money over time, not overnight.
Whether you’ve invested yet or not, these long-term tips can help you better manage your money today so that you can work toward growing your wealth for years to come. Read below and speak with anEdward Jones financial advisortoday to discuss your financial well-being.
1. Reset your relationship with money
Most of our financial habits, if you can believe it, are formed by the time we’re just seven years old. According to“Happiness, income satiation and turning points around the world,” a study from Purdue University, our feelings about money are largely influenced by those early years, which means that if you grew up lacking resources or watched your parents struggle paycheck to paycheck, you may have experienced a sense of scarcity surrounding wealth that has carried over into adulthood.4If, however, you have experienced financial security throughout your life, you are more likely to reach for financial goals you wouldn’t have previously thought possible. Everyone’s story and journey are different, but what’s most important is knowing you’re in the driver’s seat. You can help control your financial future starting today.
2. Set clear financial goals
Basic budgeting is personal finance nonnegotiable. It helps keep your spending under control and answers the timeless question, “Where did all my money go?” But to build wealth, you need to think even further ahead. You need to ask yourself: “Where do Iwantmy money to go?” Perhaps you have goals to wipe out your student loan debt, or maybe you are laser-focused on retiring at age 50. You may want to own a vacation home and travel more. Determine what matters most to you and come up with a list of goals. Warning: You may need to make some concessions. For instance, you may not be able to fully pay for college for three kids or take an extra yearly trip abroad and also bank on early retirement. But fear not: Edward Jones can help you strategize and prioritize your goals.
3. Make the most of your working years
It’s easy to assume that the security of a full-time job will always be there, but if our volatile economic landscape has taught us anything, it’s to be prepared for anything, including layoffs. Because even a single workforce interruption can mean years of playing catch-up, it’s important to maximize your savings during your working years. If your employer offers a retirement savings plan, consider putting in at least enough to get the match. For those who may foresee taking work breaks, either voluntarily or forced, consider ramping up savings in advance. For instance, put any merit increases or bonuses into a retirement account.
4. Recognize that income isn’t everything
Beware the fallacy of the big paycheck! Earning a sizable income is certainly impressive and a feat to celebrate on your path to financial security, but it won’t necessarily lead to accumulated wealth all on its own. Robert Kiyosaki, businessman and author of Rich Dad Poor Dad, tellsBusiness Insiderit most certainly won’t. Building wealth is more than earning money: It requires you to also manage your expenses — to avoid, for instance, upping your spending with every raise — and to invest, whether in the stock market, real estate, a business or some other venture.Consider automatic deposits to do this heavy lifting for you, and be sure you are leveraging other employer benefits you may be eligible for, like stock discounts.
5. Talk openly about investing
It’s long been considered taboo to talk about money. To some, it feels inappropriate, while others feel shame for a lack of financial literacy and would rather discussanythingelse. Resist the urge to change the subject! Just as salary transparency — when employees have access to information about pay, they’re better equipped to negotiate their salaries and advocate for fair compensation — can be beneficial, so can being open about your investments.
6. Work with a financial professional
If you had trouble starting your car, you’d take it to a mechanic. The same logic should apply to your finances. If you are struggling with wealth building — or even if you simply want a fresh perspective on areas for potential growth you might not be tapping into — reach out to a financial advisor. If you need help finding one, Edward Jones has approximately 19,000 financial advisors to choose from. Find a match today andget startedwith Edward Jones.
Investors should understand the risks involved of owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates, and investors can lose some or all of their principal.
Edward Jones, Member SIPC.
Sources
1Hearts & Wallets, “Portrait of U.S. Household Wealth,” 2020.
2PEW Research Center, “Gender pay gap in U.S. hasn’t changed much in two decades,” March 2023.
3“BNY Mellon Investment Management: It’s time to create a more inclusive investment world,” February 2022.
4“Happiness, income satiation and turning points around the world,” Natural Human Behavior, January 2018.
