March is Women’s History Month, and in this blog, we discuss ten steps women can take toward financial independence. Much of this applies to men as well, but I wanted to focus on financial areas I felt were especially important for women.
A lot of my clients are women. Additionally, I have two teenage daughters, so this is a topic that is especially important to me from a business as well as personal perspective. The statistics are clear… According to Ipsos, a multinational market research and consulting firm, in a study conducted in 2024, women report growing more concerned than men with their financial well-being. Specifically:
- 59% women vs 52% men are concerned about inflation.
- 61% vs 54% are concerned about the cost of living.
- And 44% vs 35% are concerned about their financial well-being.
(More American women than men feel insecure in their finances | Ipsos)
I see women every day who are trapped in an unhappy marriage or struggled through a bad divorce or are single and feel like there is nothing they can do to get ahead. Financial independence is difficult for anyone, but if you want to change your financial life for the better, the only way that can happen is for you to take the first step toward financial independence. That step may be different for everyone, but today we are going to discuss ten steps you may be able to take that can move you toward financial independence.
Step 1: Assess your financial situation.
The primary things you should know are your income, expenses, debts, and savings.You cannot go far if you don’t have a realistic perspective of where you are right now.
A suitable place to start is your bank account. If you add up all income over the last three months and divide by three (or whatever number of months you are adding together), you will get a monthly average over that length of time. Multiply that number by twelve to produce your annual figure. You will want to know what your average annual income and expenses are.
You also need to know how much debt you owe and how much money you have in savings, including your retirement savings. The money you owe is often what causes financial stress. You will need to know the total amount owed, the minimum payments required, the interest being charged, and the length of the loan.
Step 2: Create a budget.
There are a lot of resources on how to create a budget, including a blog I wrote on the subject that you can find on my website at milliganwealth.com. Develop a realistic budget that outlines your income and expenses, including paying off any outstanding debt, using the figures you created in step one. Then, create a system for tracking your spending. You should be able to know whether you are over-spending in a budgeted category before you pay for something.
Step 3: Set aside money for emergencies.
This needs to be in an account that is quickly accessible and penalty-free for early withdrawals. You will need to set aside enough cash to cover 3-6 months' living expenses. How many months you will need depends on several factors, including married status, job security, and whether you and your spouse are working, if married.
Keep in mind that it is possible to have too much in an emergency fund. Since this account is quickly accessible and penalty-free for early withdrawals, the interest earned on this money is typically low. I typically advise clients to fully fund the emergency fund, and any excess is put in accounts that earn higher interest. Over time, this can make a significant difference in the growth of your hard-earned money.
Step 4: Pay off your high-interest debt.
The order of paying off debt is to usually pay off the highest interest debt first. However, there is a lot to be said about the positive impact of paying off smaller bills first. If you have a specific bill that bothers you more than the others, pay it off first. The result could be a boost in your self-confidence that could motivate you to continue paying off debt. Only you know if that is how you work emotionally.
Step 5: Start saving and investing.
Once you have an emergency fund set up and funded, you should start contributing to a retirement account, such as a 401(k), Roth, or IRA. You will need to determine how much risk you are willing to take. That is often driven by your financial goals, which we will discuss in a minute, the return you’ll need to achieve those financial goals, and how long you have to achieve the goals.
By understanding your financial goals, you will have a better idea of how much risk you are comfortable with, and that will help you decide what types of investments you’ll want in your retirement accounts. Some types of investments are mutual funds, exchange traded funds (ETFs), stocks, bonds, and CDs.
Step 6: Increase your income.
Women typically have income struggles for several reasons. They often take time away from their work or careers to have children and care for them. They are more often than men the caregivers for aging parents or spouses, as well. Therefore, look for a side-hustle, freelance work, or be assertive and ask for a raise at your current job. Consider asking for stock options at work as well if your company has them. They may give out stock options more freely than raises. While not as desirable as a raise, since they come with risk, they might still provide added value to your income over time.
Step 7: Educate yourself.
You are doing that right now. Keep learning about finance, money management, and investing. Seek out information through reputable sources and beware of fast-money or get-rich-quick hustlers. The internet is full of them, and I have seen too many people get bad advice that hurt them financially.
Step 8: Set financial goals.
I always say you cannot know how to get to where you want to go if you don’t know where that is. Setting financial goals can be difficult or fun, depending on your perspective. There is a lot of psychology to the process, because goal achievement results in satisfaction or happiness.
I like to start the process by writing out a list of everything that I want to do or accomplish in life. Once you have that list, narrow it down to your top 5 to 8 items. Next, prioritize that list and begin clarifying each one. I like to make all my goals SMART goals.
For more information about SMART goals, see my blog, “Five Steps to Simplify Budgeting,” at https://www.milliganwealth.com/blog/five-steps-to-simplify-budgeting.
Step 9: Live below your means.
This may be one of the hardest steps in this process. You have a standard of living and changing means changing your current way of life. You must really want something to do this. You will need to resist the urge to keep up with others’ lifestyles. Focus on what is most important to you by visualizing the end game. Go back to your goals and visualize accomplishing each one. One method to do this is to start building a collage of pictures you come across that define your goal and flip through those pictures from time to time. This can help you find the motivation you need to keep striving toward your goals.
Step 10: Seek professional advice.
This is where I come in. Seek the advice of a financial professional such as a reputable fully licensed and credentialed financial advisor or wealth manager. The Certified Financial Planner® Professional or CFP® designation is one of the most highly regarded designations in our industry. A CFP® professional is a fiduciary to his or her clients and has passed some of the most rigorous testing in our industry. A qualified wealth manager can help you understand ways you can work toward financial independence and help you develop a financial plan. They can also be a great sounding board whenever you have financial questions.
No two people have the exact same path to financial independence, but my hope is that you can use these ten steps to create your own path. I use these steps when helping my clients create financial plans, and I know they can work. As I mentioned earlier in the blog though, it all depends on you. You must start taking action, and no one can make you do this.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.
Source:
Cottrill, J. (2024, March 18). More American women than men feel insecure in their finances. www.ipsos.com. Retrieved March 17, 2025, from https://www.ipsos.com/en-us/more-american-women-men-feel-insecure-their-finances#:~:text=A%20new%20Ipsos%20poll%20conducted%20on%20behalf%20of,to%20be%20concerned%20with%20inflation%2C%20cost%20of%20living
Disclaimer:
This article contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. No strategy assures success or protects against loss. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 1/2 or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.