A financial fitness test for women (and everyone)

As the new year gains momentum, many of us are focused on getting in shape – not just physically, but also in terms of our financial health.

It’s a time for taking stock, seeing how we could be managing our money better and reassessing long-term goals.

“When it comes to financial health – as with physical fitness – women have a perspective shaped by their unique priorities and life experiences. When I was 11 years old, my newly widowed mother had to take on a role typically filled by men at that time. My Mom took on the planning for our family’s financial future. I was at her side as she gained knowledge and confidence due to her keen intellect and sheer perseverance. And seeing how capable she became at making investment decisions, I learned how important it is to be financially savvy and independent. All of this inspired my own ambitions,” says Daniela O'Leary-Gill, Chief Operating Officer at BMO Financial Group.

Three basic questions

So, if you’re a woman looking to improve your financial fitness – or have a partner, friend or relative who’d appreciate a few tips – here are three basic questions, O'Leary-Gill says, that may help:

  1. How comfortable are you with managing, saving and borrowing money? A 2018 study by the Financial Industry Regulatory Authority found that “women consistently score lower than men on financial literacy measures.” Our industry is working to change this with innovative tools to make managing money easier, from automated bill payments and savings plans to apps that track expenses and help you stay within a budget. At the same time, many banks offer free education on topics such as buying a home or managing the monthly accounts.
  1. Are you confident about making investments and long-term financial plans? The idea that women are less confident as investors is quickly becoming a myth. And we’ve proven it. Studies show that women tend to be more judicious than men in the investments they make, preferring steady, stable growth over riskier prospects for quick gains. That said, women also typically focus on near-term priorities like owning a home and supporting children – and as a result, they’re often underprepared for retirement. So, there’s work to be done. Financial services must be better tailored to women’s careers, family roles, life choices and overall relationship with money.
  1. Do you operate your own business – or aspire to launch one? Many female entrepreneurs struggle with financial challenges that men are less likely to face. A recent study found that the average amount of funding received by women-owned businesses was 31% less than for businesses launched by men. “Banks clearly have a role to play here, too. At BMO, we’ve introduced training programs to help bankers better understand the priorities of women entrepreneurs. We’ve enhanced the resources we provide in areas like business planning, staffing and financing. And we’ve begun earmarking billions of dollars for loans to women-owned enterprises,” says O'Leary-Gill.

Staying financially fit year-round

“Starting the year with a financial fitness check is a great idea. For everyone with bills to pay or a dream to save for, making the right money decisions today is the key to a better future,” added O'Leary-Gill.

“For women in particular, it’s another step in bridging the fairness gap and ensuring equal access to opportunity. By helping women confidently manage their financial lives, we strengthen customer relationships, deepen employee engagement ­and drive business growth. All of which adds up to sound financial health ­– for everyone,” concluded O'Leary-Gill.

Source: https://www.linkedin.com/pulse/financial-fitness-test-women-everyone-daniela-o-leary-gill/