As a web developer, I have had the blessing of working with a lot of people; many of these have been women running businesses, fighting to stay afloat. A lot of these women were excellent in their professions as hair stylist, musicians, and chefs. However, they all seem to have a common characteristic. As I asked them questions about their businesses and their goals in wanting a new website, they all seemed to hesitantly answer no to one very important set of questions.
- Do you have a business plan?
- Do you have a separate bank account for your business?
I was surprise to hear a resounding NO to both of these answers on many occasions. This got me thinking about financial education and the ways in which women, in particular, are disproportionately affected by financial illiteracy even as we earn more money and move on to higher levels of education than many of our male counterparts.
Though over the last couple of decades women have made significant strides towards their personal development and creating an equitable society where men and women can have the same opportunities, statistics show that women are still uncomfortable with money and its handling. The confidence gap is astounding. A resent study showed that while 75% of the 1,407 American women (age 25 to 68) polled said having enough money to maintain their lifestyle throughout retirement was very important, only 14% were very confident they will meet that goal. And just 20% said they felt prepared to make smart money moves even though more than 50% of the women surveyed were the main bread-winners for their home. Statistics also showed that only 41% of women said they understand stocks and bonds well compared to 56% of men. In summary, women seem to shy away from managing money with long-term goals in mind as a result of fear.
As it stands, many women have more money invested in their closets than they do in a 401K. SuzeOrman, famous millionaire, tv celebrity and author comments about this very fact in her book, Women & Money, where she recounts her transition from being a waitress to a broker.
How does this lack of confidence affect women owned businesses?
Many women who showed discomfort in the management of their businesses financials are often the victims of over-budgeting, over-spending and being to easily seduce into purchasing items that they cannot afford. A close friend of mine, recently found herself over spending on products that she was overselling simply because she did not have a good grasp of the numbers, a costly mistake, leaving her in dire straits.
The main issue with the correction of the financial problem is often SHAME. For women, who are typically in control (household, children, businesses) admitting what they do not know and being stuck in a bad financial situation brings with it a great deal of shame. In order to push past the cycle of bad management, shame, shame, bad-management. It is absolutely necessary that women let go of the shame and focus on the solution. The more monitoring and management of the money, the more successfully and quickly, women can begin to regain their power and assert themselves as much in their professional lives thereby also improving their business.
For more education on this, Suzie Orman, has a great book, title Women & Money. Check it out.
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