Financial Independence: What is it and why is it important for women?
Financial security is just as important to women as it is to men. And if you’re wondering what financial independence means exactly, this article breaks down what it is and why it’s so crucial for women.
What is financial independence?
Financial independence is when you have enough money in the bank to cover your expenses for the rest of your life without needing a job. This requires that you save at least 50% of your income. Financial independence is important because it means you have control over your future and are no longer dependent on somebody else or their decisions.
Why is financial independence important for women?
Given the wage gap, which is rooted in various reasons ranging from outright sexism to being penalized for taking time off to have children or care for family members, it’s no surprise that women are less financially independent than men. Financial independence is achieved when you have enough money saved up through your career that you’re able to cover your living expenses without needing an outside income. It’s not necessarily about “living the life of luxury”, but rather being able to live without the anxiety of running out of money or being forced into an uncomfortable lifestyle situation like having to move back with your parents.
Financial independence become all the more important for women because many women are reliant on their husbands or significant others for financial support, and if they lose this support, they have to either downgrade their lifestyle or find a new viable source of income. If a woman wants to achieve her goals and not rely on her spouse, she needs to invest time and energy into making a plan for her financial security.
Financial independence is not an easy thing to achieve. Depending on your age, education and career path, it may take 15-50 years of hard work and perseverance before you can pay off everything and be debt-free and secure. But if you want more control over your life, it’s worthwhile to pursue this goal with tenacity. It is all the more important for women because we often have to care for our children, spouses, elderly parents or other family members. Financial independence would enable us to devote more emotional energy to these relationships without worrying about money.
Therefore, it may sound like an obscure, distant goal. But it doesn’t have to be. If you make one decision right now–whether it’s about your job or your investments–to prioritize achieving financial independence, you’ll start down the path to becoming financially secure.
Think and start.