Women and Money: 5 Ways to Stay Financially Strong During a Recession

In September 2022, The Federal Reserve announced another interest rate hike in an effort to combat inflation — but in doing so, it seems an economic recession is increasingly inevitable. Yet that doesn’t have to spell out trouble for your personal finances.

Whether you waded through the last recession or are only old enough to have heard the stories, the word “recession” may send a chill up your spine. It may be autumn, but this is not meant to be a scary story — in fact, it’s one of focus and resilience.

Let these five tips help keep you and your wallet afloat even in the face of a recession.

1. Set (and Stick to) a Budget

It’s one of the oldest tricks in the book for a reason. When you have a thorough understanding of the money coming in and going out, you’re able to consistently make financially sound decisions and avoid biting off more than you can chew.

First, take note of your recurring expenses each month like groceries, car payments, utilities, and your child’s school lunches. Then consider different budgeting strategies and find one that makes sense for you. For example, many women swear by the envelope method. The more a strategy resonates with you, the more likely you are to stick to it. Don’t be afraid to experiment, but commit to the one that serves you best.

As you’re monitoring your finances closely, you may even be able to identify ways to save more each month and increase your wealth.

2. Invest Wisely

We talk extensively about the gender pay gap, but did you know about the gender investment gap? Women comprise a criminally underrepresented share of the investment market. (Perhaps that’s why Wall Street’s Charging Bull has been around so much longer than Fearless Girl which made such a splash.)

But just because we haven’t historically taken up much space in this area doesn’t mean we shouldn’t start — in fact, we’d argue that’s more than enough reason to.

If you’re in a place to devote some income to investments, there are countless ways to do so — including high-yield savings accounts, mutual funds, stocks, and government bonds — each with their own risks and advantages. Even starting small can mean big returns later.

3. Solidify Your Retirement Account(s)

Technically, this may be considered an investment as well, but it deserves its own mention: Don’t forget about your retirement account.

Perhaps your employer offers a 401(k) or you’ve been considering a Roth IRA — whatever route you choose, contributing to a retirement account can only help, not hurt. Plus, your employer may even offer “matching” benefits to increase your account.

We statistically live long lives, yet almost half of women are worried about money in old age, so it’s always a good idea to look out for your future self financially and set her up for success later.

4. Advocate for Yourself (and Other Women)

Ladies, keep fighting the good fight. The U.S. passed the Equal Pay Act more than 50 years ago, yet as of 2022, women still make only 84% what men make, on average. When a recession rears its ugly head, it may be easy to focus on merely surviving without much thought on other systemic conditions.

But there’s no better time to ensure you are taken care of. If you feel you aren’t being paid enough for your contributions, chances are, you’re not. Here are three tips to negotiate a higher salary:

• Consider the market norm for your role, industry, and experience level.
• Prepare a range you’d like to target, not a specific number.
• If you’re met with resistance to an increase (or to the conversation at all), ask when you might be able to expect them to reconsider so you buy yourself another chance to ask in the future.

Whether you’re considering salary negotiation for yourself or not, remember to help other ladies up the ladder, too. Empower every friend, family member, and colleague to know her worth and speak up.

5. Trust Yourself!

You can’t control the entire economy, but you can control your own financial situation, your perspective, and your mindset.

Set realistic goals for the short and long term, make wise budgeting, investing, and spending decisions, and don’t lose sight of the most important thing — taking care of yourself. And girl, you got this.

For more insights on women in the economy, check out this handy infographic from our friends at Annuity.org:

The opinions and views of guest contributions are not necessarily those of theglasshammer.com