Ask the expert: Here's how women can empower their personal finances
Part of female empowerment begins with personal finance. Depending on how a person was raised or their history with money, taking ahold of their financial future can be an intimidating endeavor.
In its Ask the Expert series, Cashay reporters connect with experts on vexing personal finance topics surrounding all of life’s milestones: Education, marriage, parenthood, divorce, and even death.
Stephanie Asymkos talked with Erminia Johannson, group head of North American personal and business banking at BMO Harris. Here is Johannson's advice for young women at any stage of their personal finance journey.
[Interview has been edited for clarity and length.]
At Cashay, we love to dispel the myth that women are bad with money. In your experience, share how financially competent women are.
I've always believed three things about women and finances. The three T's: Tenacity, trust, and talk.
That tenacity exists in every woman — I would say we're a tenacious bunch. We have a way of staying committed and going the distance, and I think that holds up really well for finances because you need to be tenacious to be able to manage your finances. Just sticking with it and not giving up is half the battle.
We are a good trusting lot, but we also need to find advisors that we trust. We've got good gut instincts. Trust your instincts, particularly around people who are giving you advice and guidance. [But] at the end of the day, you own the shot, you own the play, and trusting your gut is really important. That notion of being able to say 'I own this, I can do this, and I trust my instincts,' it's really important, particularly around getting advice and guidance.
The last one is talk. We're social creatures and you can talk to advisors, but also share with friends. Ask, learn, and get guidance from someone who’s maybe walked that area before or bought a home or paid off their student debt.
How can a woman begin to save for her first big purchase?
Start nibbling at it and don't give up. If it's saving $20 a week or if you're not going to buy the latte for this week — what are you going to do to put that money away? There are all sorts of things that you can do like setting up an automatic withdrawal or setting alerts on your credit card for how much you want to spend or not spend. That’s going to help you navigate that small into something bigger.
The other perspective is to say: Pay yourself first. It’s an old adage that everybody says, and it could be small. I really just encourage people to say you can go small, don't get too big.
Why is it so important for women to talk about money and their financial goals with their partners, and within their female friendships?
If you're in a relationship and your partner's male, then don't abdicate. Talk with them, you own it, and be part of decisions.
If we rely too much on our partners, we just react — we don't know and then we're in a situation. I've seen this happen where literally the female in the relationship has no clue where the finances are and has no clue how much money they have or perhaps don't have. Then either the partner leaves or you decide to leave, or death or something tragic happens, and you have to take control. It could be a relationship with one person who has an aptitude for keeping track of the finances and just love numbers, but it doesn't mean that the other doesn’t stay knowledgeable.
I would say the same thing with friends. Keep each other in check of how you're doing on your goals and investing, what stocks, mutual funds, or ETFs you’re buying, or ask the latest on the marketplace.
How big of a role do you think a woman's financial fitness and literacy play in her empowerment?
Anyone always likes to do something they know more about, but I do think you have to have a curiosity about finances.
Stereotypically, women haven't been allowed either to know how income happens in the house or how it's created or used. All those stereotypes could be there.
It's imperative that we teach everyone, particularly women, to ask the right questions to be financially literate. I can say that's a big obligation for us. When we're sitting across the table from a couple, male and female, let's say, we actually speak to them as equal. They are equal. And we have to make sure both are comfortable.
We're part of helping you be successful and so we're here to answer questions, talk to you, motivate or keep you going.
Personal finance has its own intimidating language. How can a young woman begin her self-education?
There’s probably too much information in some ways when you think about it. It can be overwhelming, but it's there for you to stimulate interest or awareness.
You can Google any financial term! You can find that information. It's not a secret club anymore and you don’t have to ask an older male in your life for that information, or your banker or your financial advisor. You should have confidence.
For the young woman who might not have an interest in her personal finances, what would you say to motivate her to learn and take an interest?
It's really interesting and fun! I know that sounds like a silly answer, but I think sometimes there's a perception around money that says it's hard, it's complicated, and it's for someone else. But it's not and it isn’t driven by your economic heritage.
Whatever the perceptions were, we have to just keep talking to people, to women in particular, about the fact that it isn't as complicated as you think.
It's important for you, it's important for your life, and you're capable and competent. You've got support around you. Don't be afraid.
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. She can be reached at stephanie.asymkos@yahoofinance.com. Follow her on Twitter @SJAsymkos.
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