The biggest barrier women face in achieving their financial goals is a lack of money. Although many women enjoy successful careers, there is still a gender wage gap to contend with. According to Salary.com, over a 40-year career at median incomes, a woman would take home about $400,000 less than a man. Geography plays a role too; with women in Vermont making 90% of what their male counterparts earn, but women in Wyoming only making 65%.
It’s going to take more than a side hustle or selling pre-worn clothing and belongings on e-commerce marketplaces for women to boost their overall earnings. GOBankingRates spoke with Pam Krueger, CEO and founder of Wealthramp, a fiduciary advisor matching platform, to learn about the six best steps women can take to boost their wealth.
Now is not the time to wait for a raise or a new opportunity to come to you. Krueger said to take the reins and be in a proactive mindset.
If you’re seeking a raise, create a list of your outstanding accomplishments and their return on investment on the business. Gather credible salary data for your role and location as part of due diligence for negotiations. Consider other benefits that you may be able to take advantage of, like an education stipend, to better support your lifestyle. If you don’t see certain benefits offered that could act as a financial boost to you, put in a request or suggest it.
Tap Into Valuable Work Benefits
This includes your HSA, FSA and a full match on 401(k) if your company offers these benefits.
“You may also want to consider working longer, deferring Social Security benefits, maxing out retirement accounts and using long-term care,” said Krueger.
Don’t Overlook Your 401(k)
Your 401(k) is here to help you invest smartly by using dollar-cost averaging, one of the most proven investment strategies. “When you systematically contribute from each paycheck to your 401(k) at work, you automatically buy shares of stock sometimes when stock prices are lower, and other times when prices are higher,” said Krueger.
This means that instead of playing a guessing game about when to buy into the market, dollar-cost averaging smooths out the highs and lows. “Over time, you wind up buying shares at an ‘average’ price and thus you reduce your risk of always buying at the top of the market,” said Krueger.
Take Control of Your Financial Life
It’s time to take total control of every aspect of your financial life. This is especially true of any women in a relationship or married that has been the one to sit back and not engage in their finances.
Not engaging in your finances costs you more than you realize. Krueger said that in taking control of your financial life, make sure you have an understanding of the following areas.
- Any debt you carry
- Your credit score
- How much you have in emergency cash savings
- Your money philosophy and approach to spending, saving and investing
- Your ability to negotiate and ask for what you want
“All of that confidence comes from within when you know your finances,” said Krueger.
Consider Help From a Fiduciary Financial Advisor
Consulting a fiduciary financial advisor for help does mean spending money, but Krueger said getting this advice more than pays for it in the long run. A qualified fiduciary financial advisor will be able to complete a cash flow analysis based on your personal situation and audit your investments, including a 401(k), to make sure you’re not overpaying in fees. From there, this advisor will make recommendations.
If you are considering working with an advisor, Krueger recommends taking your time to find the right person. Do not rush into picking an advisor or choose someone with questionable credentials in the hopes of cutting corners to make more money.
Carefully interview them and make sure they are truly looking out for your best interests. A lack of income can be a big financial barrier, but receiving bad financial advice can derail your financial future and even cause you to lose money.
“Fortifying your finances and sense of financial security starts by getting educated and then creating new wealth-building habits and making smart money decisions,” said Krueger. “Knowledge is power when it comes to money.”
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