Every woman should be the boss of her finance

by Karen

Financial independency is very important to me. It is more than a matter of strength. Financial independency is a necessity for me. In my family, I am known as the budget hawk that controls the family budget with an iron grip and I insisted in managing my investment portfolio without the help of a wealth advisor. I had a good reason for being a control freak over my investment. Part of the reason is that I am a control maniac the other part (I suspect that more than my need for control) is my need for financial stability.

For a very long time, financial stability was one thing that I fear and need.  In contrast, my hubby has no such fear or need. He kept telling me: fear is just fear itself. Well, he doesn’t fear financial stability because he never had to live in poverty. I did and so I will always have this annoying fear that keeps me alert and  would venture a guess that most people share this fear of not having enough money and how to best provide for our love ones. I understand this fear all too well because I had lived with it for so long.

When my sister was just 5 years old and I was 11, we lost our dad to cancer. Up till then, we had a wonderful middle-class family life with loving parents. Within a year my dad felt ill and our family went into financial turmoil.  So there we were: a young widow, and two kids. I witnessed how tough it was for my mom to hold the family together.

Unlike many women of her generation, my mother was the financial controller of the family. There was no life insurance or pension for survivors in our home country and my dad was the bread winner, thus his passing had tremendous economic impact to our lives. I imagined that we would end up in very tough situation if my mom wasn’t financially savvy. Years later we landed in Canada after spending almost 6 years in a refugee camp (another story for another day), we had CAD$800 in our pocket and some clothes. We had to rebuild our life all over again.

My family story is not unique one. Canada is a country of immigrant so most of us understand too well the difficulty of re-building life in a new country. Fast forward 23 years later, we own three houses, savings and both my sister and I have had successful careers. Looking back, it was a long and hard road to get to where we are today. For the first few years, we lived way…way…under the poverty line.

As tough as it was, I learn an important lesson: you must always have full control of personal finance and be positive! To me, my ability to understand and control my own finance is just as important as my ability to earn a living. Taking control of your own finances means you will never find yourself in a situation where you are reliant on someone else. I alone can determine my fate, and that alone is a good enough reason for me to always have full control of my own finance.

So, I am a passionate promoter to empower women through financial independency. I truly believe that financial independency is one of the key factors to equal the play field for women. And no, I don’t secretly harbour the ambition to convert all women into budget hawks like me. Admittedly, I love to see more budget hawkish people – my pep!  But the truth is after spending 15 years in financial service industry I witnessed first-hand many heart-breaking stories of women ended up in desperate situations due to their inability to control their finances. There were so many stories that can’t list them all.  I often wondered: how many women do you know can say that they are living the best life they possibly could? How many don’t even realize that things could be better when they more control of their life?

In my experience, women who have tough time managing their money or having financial security will likely have troubles in other areas of their life. To have financial stability and independency is crucial to achieve a balance and happy life. Having control of your own money will enable you to do what you want instead of what you must. If you had money, you would no longer be held back by fear, stay in bad job or bad relationship, or treat yourself poorly.  Therefore, it is very important for you ladies, regardless of your marital status to take an active role in your finance. By taking a more active role in your finance, you will gain more clarity, confidence and control of your destiny.

You need to learn as much as possible about money and money management. Warren Buffet summed it up best: “The best investment is in your own abilities”. Ladies, this is one ability that I wholeheartedly encourage you invest in.  The power to be financially independent and in control of your assets will give you tremendous confident and satisfaction.

I hope I sufficiently convince you to take charge and have your financial independency. As I said before, wealth is an important component to ensure you have a happy life. So, take charge and make sure you have sufficient and independent wealth to meet your needs.

7 steps to have financial independent

Now, let’s talk about the “how”. How can you take steps to gain financial independency? Below are steps that I took to ensure that I am the boss of my finance, hope you will find them useful:

  1. Educate yourself in financial matters. I encourage you to read business news from sources like Reuter, The Economist, NY Times, BBC, Wall street Journal, Bloomberg and the Globe and Mail. Yes, I have to have 1 Canadian source at the very least. These publications are trustworthy sources and they have a wide range of business and finance topics. If you are the boss, you need to be informed and knowledgeable.
  2. Know your cash flow. Create a personal budget and please stick with the budget. Check out my post on personal budget. I will end my lecture on personal budget here.
  3. Be sure to pay the bills. It is a silly, but I encourage you to do the bill payments on your own. Seriously, I lost count how many time wives came to the bank in distress because they didn’t have to pay bills before and didn’t know how to do it.
  4. Maintain your own personal account. No, I am not telling you to hide money from your spouse, but it is important to have your individual account separate from your joint account for your personal needs.
  5. Learn to invest early. Check out my post on Getting over your fear of investing in stock market. Investing can be fun and not scary at all. I will soon publish posts on mutual funds and other investments. Stay tune for those.
  6. Reduce your debts. To live financially independent, happy and less stressful, you need to eliminate the harmful debts that will drain your energy and mind. I will write a post on debt consolidation. This topic deserves a post because it can be complicated.
  7. Maintain financial neutrality and equality in your relationship. Whew, it is a mouthful to say that sentence, but I want to emphasize the fact that financial equality is important in a relationship. It doesn’t matter who earns more money, both partners should have equal access to the family finance and have respect each other independent. In my family I control the finance of the family because I am efficient and hawkish about finance. My hubby is very useful for taking care of home improvement stuffs. So, we utilize each other strengths and get the works done faster and better, but we always communicate to each other on all decisions. My husband knows exactly which bank our money has, how much money we have and where my life insurance policy is. He is not the beneficiary on my insurance and he accepts that! More importantly, you need to tell your partner about these things so when the bad thing happens (which you won’t know when unless you are a psychic). Your family will have access to the finance and won’t have additional financial stress on top of emotional strains.

It is even more important to have financial independency when you choose to be a home maker. Just because you don’t earn an income it doesn’t mean that you should not have control over the family finance.  One of my close friend was a home maker for over 20 years but her hubby couldn’t even spend $10 without her knowing. Funny thing is: he was a top wealth advisor who earned a hefty 6 figures income. He managed their investment portfolio but his wife was the CFO of the family. He brought the bacons home and she cooked them! It is a true-life time partnership. They have a wonderful marriage because they have mutual respect and appreciated each other’s role in building a happy family life.

For a while now, I thought of how I can show women how to accomplish financial freedom so you could move forward on the path of financial independency and to fulfill your dream of having a happy and balance life.  That was also one of my inspirations to start this blog. I want to share with you my experience and my learning as a financial service professional, mom, wife, sister and daughter.  I sincerely hope that you can gain useful information to help you on your path to financial freedom and independency.

Do you have full control of your finance? How do you do it? I believe wholeheartedly that this is an important topic to discuss and there are more than 1 right answer. So, I am very curious to hear other women’s perspectives on this topic. Share with me your thoughts and experience.

You may also like

Leave a Comment