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Financial Empowerment: Why It’s Important

Ruzwana Bashir, founder and CEO of Peek.com, knows the importance of financial empowerment.

Bashir was told that women shouldn’t pursue higher education, but that didn’t stop her. Instead, she chased her goals and learned first-hand what a difference financial empowerment can make in someone’s life and finances. Bashir got an education, paid off her student loans, founded a company, and invested in her future — and she credits financial awareness and empowerment for helping her take those steps.

What is Financial Empowerment?

Financial empowerment is the feeling of being in control of your own financial situation. When you feel this kind of empowerment, you feel that you control your financial situation and not the other way around. 

What Financial Empowerment is Not

Financial empowerment isn’t about how much money you make. You might feel like you’ll reach financial empowerment when you have a higher income, but that’s simply not true. A study by the financial services firm Morningstar revealed that people of any income level can feel empowered. And what’s more, those with lower levels of income who feel empowered report more positive experiences with money than those in higher levels of income who feel disempowered.

Why is Financial Empowerment Important?

When it comes to improving your finances, many people look specifically at the economic component. And while there are plenty of tools out there to help you master your money (including the tools we offer at Personal Capital), it’s only one piece of the puzzle. 

The emotional component of personal finances is just as important. When people feel more financially empowered, they feel more confident in making decisions to change the trajectory of their lives. They can take steps to increase their income, pay off debt, and save for their financial goals. Empowerment can also help people to overcome roadblocks with confidence, rather than letting those roadblocks set them back in their finances.

How Can I Reach Financial Empowerment Myself?

Pursue financial education

Financial education is the cornerstone of financial empowerment. Have you ever walked out of a test after having known the right answer to every question? You feel confident and excited to get your results back. But when you’re unsure of the test material and know you were unprepared, you walk away feeling defeated and anxious about getting your grade back.

Personal finance is similar. The more financial literacy and education you have, the more confident and empowered you can feel in making the best financial decisions for yourself. As the saying goes, knowledge is power.

Change your mindset around money

Your money mindset (aka your beliefs and attitudes around money) has a lot more to do with your financial situation than you think. Most of what we believe about money stems from our early years and things that we subconsciously picked up from family. And for many people, those beliefs resemble things like, “I’m not good with money.” 

When you spend your life believing that, it can be hard to adjust your mindset. But giving up the limiting beliefs you have around money is one of the best ways to reach financial empowerment.

Be intentional about your money

Far too many people go through life feeling like it’s their money that controls them, not the other way around. Changing this thought process can help you take back the power when it comes to your money. And how can you do that? By being intentional with your finances and deciding for yourself where your money is going. Sitting down each month and choosing ahead of time where you’ll spend your money is one of the most empowering moves you can make. And when you actually follow through, you’ll begin to have more confidence in yourself.

Advocate for yourself

Personal Capital’s Financial Hero Bashir has worked hard to champion women’s financial empowerment. Historically women have often not had a seat at the table when it comes to money. Even studies as recent as 2019 show that in most relationships, the male partners are the ones making the big financial decisions.

And yet studies show that when couples approach financial goals and decisions as a team, women report having higher confidence and less stress around money. One of the best things that women can do to reach financial empowerment is to advocate for yourself and ensure yourself a seat at the table where decisions are being made. And those with female partners can help them reach empowerment by opening the doors of communication and making financial decisions a collaborative effort.

One of the best ways for individuals to face their financial goals and decisions head-on is by using Personal Capital’s financial dashboard, which allows you to:

  • Get an accurate view of your net worth
  • See all your accounts in one place, including your investments
  • Track and manage your retirement savings goals
  • Organize your saving and spending automatically

Get Your Free Tools for Financial Empowerment

Featured individuals are paid spokespeople and not clients of PCAC and do not make any endorsements or recommendations about securities offerings or investment strategy.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Erin Gobler is a money coach who helps people pay off debt and reach their big financial goals without giving up spending on the things they love.
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