It is well-established that financial literacy is a critical factor in being financially independent. The more you know and understand finance, the better you are prepared to make important financial decisions. Historically, women have had lower financial literacy scores than men for many reasons, including lack of access to resources, social norms, and the need to focus on other issues.

That said, women typically live longer than men, and studies suggest that they face systemic barriers that make it difficult for them to achieve the same level of financial literacy and economic security as men. This, in turn, makes it progressively difficult to plan for retirement, accumulate wealth, and invest money, despite women’s increased participation in higher education and in the workforce.

Here are some steps women can take to increase their financial literacy so they can make informed financial decisions.


What is financial literacy?

Financial literacy is the understanding of the value of money, how it works, and how to make it work for you.


Seek out information

Unfortunately, women have often been shut out of financial conversations due to a lack of access to educational resources, financial resources and ongoing stereotypes about women’s ability to manage finances.

A significant step in building your financial literacy is to start pursuing information and knowledge. Many resources are available online, including introductory personal finance courses, newsletters, websites and podcasts that explain key concepts. Many of them are written for general audiences, so they’re designed for beginners to understand.

Find them, subscribe to them, follow them, and learn from them.


Find an advisor you trust

Women typically view financial risks and investments differently than men and tend to feel less confident in financial conversations. Find an advisor who respects you and your goals and understands your unique financial needs. Ensure it’s someone you feel comfortable talking with and asking questions of. Ask them to explain everything so you understand all the important terms, phrases, and strategies.

Don’t be tempted to think you’ll never understand finance. You can, and you will. You just need someone to explain it to you in a way that is meaningful to you. And you need someone who builds a strategy based on your financial responsibilities and pressures.


Build an emergency fund

Build an emergency fund of your own. An emergency savings account gives you some financial independence in a crisis. Find a way to save up three to six months of expenses so that you have some breathing space if you lose your income or financial resources. The work you put into saving that money and managing the savings account will teach you about how money works.


Check your credit score

If you have any credit in your name, you have a credit score. Knowing it and understanding its role in your finances is a massive step towards financial literacy. Your credit score affects your eligibility for loans, leases, credit cards, and mortgages. Utility companies might check your credit score when you open an account, and rental agencies take it into account when renting to you.

If your credit score is low, look into ways to build it up. There are many resources available to teach you about improving your credit score.


Continue educating yourself

You don’t have to become a finance expert to be financially literate, but having a basic understanding will help you make better financial decisions, and it will help you get on the path to financial independence.

Commit yourself to continually learning about finances, or at least to always being involved in your financial decisions, so you have control over your future.


Final thoughts

Financial independence involves you having the money you need to live the lifestyle you want, but it also means being confident in making your own financial decisions. Financial literacy can give you some of the confidence you need to make important decisions.

If you have any questions, feel free to Join the conversation…


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