How to Build Wealth Without Losing Your Femininity
Reading Time: 10 minutes
“Save, save, save,” my dad would always say. Growing up with a father who is a financial advisor made even the smallest purchases opportunities for money management lessons. Although I didn’t yet understand the gravity of financial planning at the age of seven, I still remember the lessons that became ingrained in me as a young girl. I would go to my dad’s office with my light pink piggy bank to “invest” my savings, my legs dangling from the chair as we talked about my financial dreams. If I had to guess, my dreams were to buy a new sparkly leotard for gymnastics and to save up for a pet hamster. It would take a few years for me to realize not only how lucky I was to start saving early, but how important of a piece that would be in the puzzle of adult life.
A memorable bit of advice my dad gave me in high school when I began to show more of an interest in the world of asset management was to “Take care of your money and your money will take care of you.” Whether you are starting your first job, or years into the workforce, it is never too early to be intentional in your financial life. For this week's article, I interviewed my father, a Certified Financial Planner with 34 years of experience. I also had the pleasure of discussing this topic with my sister, an Associate Financial Advisor with 13 years of experience, who added her feminine touch.
According to a survey from CNBC, 60% of Americans report living paycheck to paycheck. Financial literacy is not often taught in schools or universities, leaving many feeling unequipped to make wise financial decisions. Managing your finances intentionally is highly important because it sets the foundation for your future lifestyle. If you have a plan for how to navigate financial matters, you will accumulate the resources to fund your dreams, whatever they might be. With the help of these insights, you will feel more confident in your financial life.
Define your Version of “Rich”
What does it mean to be rich to you? Wealth can take many different forms. One person’s dream might be to live a life of luxury with a nice home, expensive cars, and quality clothes. Another person might instead rent an apartment and spend money on experiences they find enriching, like travel, fitness, and charitable giving. Social pressures aside, what is it that you truly want? Each person is allowed to differ in their definition of a full life. The key is to make sure that whatever your version of rich might be, you are aligning your financial habits to make your dreams achievable.
Distinguishing Wants vs. Needs
Are you able to separate what you want from what you need? A want is something that you would enjoy having like a dainty new necklace or sundress for an upcoming trip. A need, on the other hand, like groceries is different in that if neglected could cause you harm. Wants can make our lives more enjoyable, while needs are essential to our wellbeing. One can waste a significant amount of money by mislabeling “wants” as “needs.” In my own life, I might be tempted to label buying a fresh-pressed juice on my morning walk as a need because it’s healthy and delicious. But the reality is that the juice is a treat and I don’t need it. This does not mean that you can’t buy things that you want! You can integrate your “wants” into a budget, so you can enjoy these purchases stress-free. Be intentional with what you buy and consider how it might contribute to or detract from your financial vision.
Creating a Budget
Call me crazy, but I think budgeting is actually quite fun. Instead of going through a cycle of spending, then worrying about whether you’ll have enough money for the next month or year’s expenses, budgeting affords you clarity and calm. Ameriprise Financial, a financial services firm that manages 1.6 trillion in assets, provides common budgeting strategies that can be adapted to fit your particular needs. A great example for how to begin budgeting is by using the 50/30/20 method, which is broken down as follows:
50%: Needs (housing, groceries, utilities, debt payments)
30%: “Wants” (gym memberships, streaming subscriptions, eating out, vacations)
20%: Savings (cash reserve, retirement)
Budgeting is wonderful because it enables you to tend to critical expenses like housing while still allowing appropriate room for leisurely spending. Planning how to allocate your resources is a precursor to other financial frameworks such as systematic savings (which will be discussed shortly).
Setting Financial Goals
Create goals for your finances that are realistic, time-bound, and that you are committed to reaching over a specific time frame. An example of a short-term financial goal would be saving money to comfortably take a trip with friends by the end of the year. Remind yourself that your financial goals ought to be true to your priorities, rather than reflecting how you “think” you should spend or save your money.
Saving money to upgrade your apartment’s or home’s furniture is an example of a medium-term goal, or an objective you want to meet within one to five years. Finally, an example of a long-term financial goal, or a goal you intend to reach in more than five years, could be buying a home or accumulating funds to start a business. No matter how small or significant, reaching your financial dreams is incredibly rewarding.
Build a Cash Reserve (Emergency Fund)
An emergency fund is a reserve intended to cover unexpected expenses. Money pulled from an emergency fund might go toward car repair, medical bills, urgent travel, or replacement for income loss. A staggering 54% of Americans don’t have enough funds to cover three months of expenses. Having a cushion is helpful in providing financial peace and security following a change in circumstances. Experts typically recommend setting aside three to six months of essential expenses as a security blanket. If you find yourself in a situation where you are unable to allocate the resources to satisfy this advice, Fidelity suggests starting by setting aside $1,000 and working toward three to six months of essential expenses.
Building Your Savings
When it comes to saving money, aim to pay yourself first. Rather than saving what is left at the end of the month, make it a habit to set aside a percentage of your paycheck that can go to your savings, investments, or retirement. This can be made easier by having systematic monthly savings, or a set amount that is withdrawn from your bank account and contributed to any or all of the aforementioned accounts. Even the most disciplined person can struggle to regularly save, and so systematic monthly savings systems can help by building wealth consistently.
Taking Advantage of Employer Contributions
Does your company offer a 401(k) match, employee stock purchase plan (ESPP), health savings account (HSA) contributions, or other retirement and wellness incentives? Taking advantage of these benefits is essentially receiving additional compensation in the form of tax-advantaged or “free” money. Beyond retirement contributions, many companies also offer benefits such as tuition reimbursement, wellness stipends, commuter benefits, or mental health resources. Many of these resources go unused due to lack of awareness.
Be sure to research your company’s full benefits package and understand how each program works. If you are unsure of your benefits, reach out to your human resources team, who can help clarify your options and guide you on how to maximize them. Intentionally using these incentives can significantly increase your overall compensation and support your financial goals.
Be Aware of Lifestyle Creep
Lifestyle creep is the phenomenon that describes when spending expands in response to income increases. The danger lifestyle inflation presents is in transforming former luxuries into perceived necessities. As a result, your standard of living rises, but savings do not increase proportionally. As you make more money, continue to practice mindful spending habits. There is nothing wrong with conscious purchases that enhance your life, but try your best to minimize unnecessary spending. Think about your future self and how you can create more financial flexibility for her.
Optimizing Everyday Spending
Services like getting your nails done and eating out have become increasingly normalized. These are surprisingly expensive and, if engaged in frivolously, can hinder financial stability. Limiting these activities does not mean that you must forego them completely, but instead present an opportunity to learn and enjoy doing them yourself. While I tend to keep my manicures simple at home, I have a good friend that has learned to do incredibly beautiful designs and shapes. Cooking at home is another wonderful way to save money while maintaining good health. Going out to eat can be delicious, but as restaurants increasingly cut costs by using lower-quality ingredients, consumers are paying a premium to eat less nutritious meals. Developing resourcefulness early on pays dividends in many areas of life, including starting a family, navigating unexpected financial hardship, and cultivating generosity through saving.
Being Intentional about Relationships and Money
According to Psychology Today, one in three couples say that money is one of their main sources of conflict. Whether you are single or married or anything in between, it is beneficial to have honest conversations about spending habits and financial goals. Finances are not just numbers; they point to an individual's fears, habits, dreams, and life philosophy. While it may be ideal to have a similar view of money as your partner, there is certainly room for compromise and bringing each other closer to a healthy baseline. Have conversations about finances often and encourage each other to build long-term wealth together.
Practicing Generosity
Money itself is not evil. It is a resource that, if used wisely, can truly enhance a person’s life. Practicing generosity is extremely rewarding, helping guard against greed and providing the opportunity to bless others. Being generous with your resources combats a mindset of scarcity and extends your money beyond what you could singularly accomplish. Per a study from the Harvard Business Review, people derive more happiness from spending money on other people than spending it on themselves. What might be some ways that you can practice generosity in your life?
I hope you can find excitement in thinking about your finances. Small steps you take now help shift your money management habits, making what may feel unnatural at first become second nature over time. Think of your finances as seeds being planted—nurtured today so they can grow into a beautiful garden that will support you for years to come.
This content is for educational purposes only and is not intended to be financial advice.