#ICYM our IWD Conversation
Here are the key takeaways on building financial confidence as a woman.
Hello Boarders,
If you missed our International Women's Day conversation on building financial confidence as a woman, you're in luck. Here are the key learnings we took from our conversation with Ibiyinka Ibru, because every woman deserves to have this information at her fingertips.
Why women don’t talk about money as much as men.
Women often shy away from discussing money due to societal conditioning. In many cultures, men are expected to be the primary breadwinners and caretakers of finances. Women tend to see money more as security than a tool for advancement, which can lead to avoidance of financial conversations.
Increasing financial literacy and initiating conversations can help break down these barriers.
On thinking about negotiating better pay as you grow in your career.
Women often focus solely on career advancement without considering strategies to increase their income. Ibiyinka emphasized the importance of aligning with projects that contribute to the company's goals and gain visibility among top management.
Women are often tasked with additional responsibilities like committee roles or event planning, but it's crucial to prioritize tasks that directly impact the company's success.
On how you should think about your investments.
Before diving into investments, it's essential to understand your finances, including income, expenses, and debts. Paying off your debt and building an emergency fund should come before investing.
When considering investing, you need to understand your risk appetite, and make investment decisions accordingly. Index funds offer a safer entry into the stock market, than picking individual stocks. If you choose to pick individual stocks, ensure you conduct thorough research on the company and have confidence in the company's potential. Patience is key when investing in the stock market and navigating market fluctuations. This is why it's important to be in a financially healthy place before investing, so that you ensure you do not liquidate your investments to take care of emergencies.
On investing in crypto.
Investing in cryptocurrency can be lucrative, but it demands a thorough understanding of the market. Never invest in something you don't understand. Approach crypto investment akin to stock market investment—adopt a long-term perspective and adhere to a fixed investment strategy. This allows you to benefit from dollar-cost averaging.
If crypto trading isn't your primary focus, avoid attempting to time the market by buying low and selling high, or reacting emotionally to price fluctuations.
Read a previous Compass post about investing in crypto here.
On budgeting and improving your day-to-day spending habits.
As per Ibiyinka's insights, purchasing coffee a few times a week doesn't significantly impact your finances. It's essential to allocate funds to things that bring you joy, like your daily coffee, while cutting back on expenses that hold less value to you. Since we earn our money through hard work, it's reasonable to indulge in things that bring us happiness.
This is where budgeting proves invaluable. It enables you to allocate funds to what truly matters to you. When creating a budget, it's crucial to base it on your actual spending habits rather than assumptions. Review your bank statements to identify where most of your expenses go, and allocate your budget accordingly. Plan your budget based on your income, ensuring intentional spending on your priorities.
On navigating rising inflation and currency devaluation.
It's important to find ways to increase your income, although it may seem challenging at first. The internet has made it easy to export your services worldwide, allowing you to earn in foreign currencies. Additionally, consider opportunities to save or invest in foreign currencies to protect the value of your funds.
Furthermore, it's crucial to be deliberate and wise with your spending habits. Prioritize essentials and allocate funds towards investments rather than unnecessary expenses.
One learning we can take from older generations on investing.
Patience is key to financial success. Despite changes in the economy, the wisdom of older generations still holds true: building wealth takes time. By being patient and letting investments grow over time, we can benefit from the power of compounding (read a previous Compass post about investing here). It's not about rushing to the finish line but about building a strong foundation for lasting prosperity.