As women in engineering, we’re no strangers to tackling complex challenges. However, life often has a way of testing our resilience. Kiran shares one such incident:
“A few years ago, my close friend, a talented engineer, faced unimaginable loss when her husband passed away unexpectedly. The harsh reality of financial planning hit her hard, while also grappling with loss and grief.
With a young family to support, she quickly realized that she had never paid close attention to money matters — she did not recall passwords to shared financial accounts, and now she had to start from scratch to take charge of her finances and provide for her loved ones. This experience hit me hard. It also served as a wake-up call for me and highlighted the urgency for financial awareness among women in engineering — a thing some of us often end up shirking”
This blog is a collective plea from us authors to our SWE-sters to start building financial awareness in their path towards financial security. Regardless of where you are in your career, starting now is the best course — and the statistics also demonstrate that early action can significantly impact long-term success!
We know that women live longer than men, increasing the likelihood of outliving their retirement savings. According to a report by the Boston Consulting Group (BCG), women are more likely to be financially vulnerable, and women hold only 32% of global wealth worldwide.
A survey by Fidelity Investments found that 77% of women take control of their finances only after a divorce or the death of a spouse. Lack of financial awareness or empowerment among women is a gendered and systemic concern, but there are some things you can do at an individual level to bridge the divide.
Starting on the path toward financial literacy doesn’t have to be scary!
We’re a team of women in various stages of our careers and financial independence: Sreyoshi and Kiran are established mid-career engineers, Naveena is an early career professional thriving in her career, and Kayli is a graduate student just beginning to navigate living expenses, insurance, investing, and housing on her own.
We’re here to share some strategies and empower you through simple, actionable steps that will help you become more confident and in control of your financial future.
Here are our top strategies and corresponding actions, drawing on our own experiences, that we believe will help nudge you further along on your path to financial fearlessness:
1. Embrace Your Ability and Cultivate a Financial Willingness
As a talented engineer, Naveena thought she had it all figured out — until an unexpected layoff turned her world upside down. But in that moment, she discovered a transformative truth: financial empowerment begins with willingness, not just ability.
With newfound determination, Naveena bridged the gap between her analytical skills and investment knowledge. She devoured personal finance books, joined supportive forums, and set achievable goals to unleash financial confidence
Thus, the first step everyone can take is to recognize and calibrate your capacity for financial management and cultivate the willingness to learn. An easy exercise is to take a piece of paper and list your strengths and weaknesses, set SMART (specific, measurable, achievable, relevant, and time-bound) goals for your financial future, and seek resources and support for the rest.
Actions That Help With This Step:
Educate Yourself on Personal Finance
- Books: Start with accessible personal finance books like Rich Dad Poor Dad by Robert Kiyosaki, Women & Money by Suze Orman, or The Simple Path to Wealth by JL Collins.
- Online Courses: Platforms like Udemy, Coursera, and edX offer personal finance courses tailored to different levels, from beginner to advanced.
- Podcasts: Listen to financial podcasts geared toward women, such as “So Money” by Farnoosh Torabi or “HerMoney” by Jean Chatzky, to gain financial insights from experts.
- Websites: The Financial Diet, NerdWallet, Bogleheads
- Financial Advisors and Planners: Look for advisors with a fiduciary duty who are certified financial planners (CFPs).
Start Understanding How to Plan a Budget and Build Emergency Savings
- Budgeting Apps: Use apps like Mint, YNAB (You Need A Budget), or PocketGuard to help manage spending and savings.
- Emergency Fund: Aim to save at least 3-6 months worth of living expenses. Set up a high-yield savings account to keep these funds accessible and growing.
2. Use Your Everyday to Your Advantage
Kayli graduated with her bachelor’s degree in May 2024 and moved into her first off-campus apartment, ready to start her life as an independent adult. One of her first steps was applying for a credit card, which was promptly rejected.
Though the experience frustrated her and made her worry that she wasn’t ready for the “real world,” she gave it another shot. She made an appointment at her bank where a manager patiently answered her questions about credit, budgeting, and savings — and more importantly, how to fill out her application accurately as a student without a fixed income. That conversation opened her eyes to how much she needed to learn about her finances and how small, everyday decisions could make a big difference in the long run to her financial stability.
More importantly, it sparked a broader realization: financial literacy isn’t just about credit cards or budgets. It’s about the everyday decisions that can help you build a foundation for financial independence and strength. By searching online, asking experts the right questions, and exhausting her network of friends and family with more questions, she began equipping herself with the tools to navigate not just her finances, but her future.
Actions That Help With This Step:
Build a Positive Credit History
- Understand Your Credit Score: Credit scores are a crucial part of establishing yourself and play a large role in the loans you may receive for important purchases like a car or a house. A higher credit score can help you secure lower interest rates and more favorable loan terms, potentially saving you thousands of dollars over time. On the other hand, a lower score can lead to higher interest rates, increased fees, or even rejection for loans. Understanding how your score works and what factors affect it — such as payment history, credit utilization, and length of credit history — will help you make informed decisions to protect and improve your score.
- Always Pay On Time: Your payment history is the most significant factor in your credit score, accounting for 35% of it. Set reminders or automate payments to ensure you never miss a due date, but make sure you have enough money in your account to pay an automatic withdrawal! Late payments can stay on your report for years, so consistency is crucial.
- Build Credit History: The length of your credit history can account for 15% of your credit score and is necessary to open a good credit card to begin with. If you’re new to the credit card world, there are a couple options for you. First, many people build credit history as an authorized user on their parents’ accounts. This allows you to benefit from their established credit history, which can also strengthen your relationship with the bank — making them more likely to approve your own credit card in the future. Second, if you have trouble opening a credit card with a reputable bank, retailers (such as Target or Kohl’s) are often easier to qualify for. But use them responsibly, and avoid unnecessary purchases just because you have access to credit!
- Ask for Advice: As with any new life skill, applying for and maintaining credit cards can be challenging. If possible, lean on your network of experience. Whether it’s a parent, a friend, or even your bank’s financial advisors, you’ll benefit from asking questions instead of making a guess!
- Try Not to Max Out: Your credit utilization ratio — how much credit you’re using compared to your limit — should ideally stay below 30%. If your card has a $1,000 limit, aim to keep your balance under $300 before the billing statement closing date. Paying off balances regularly, or in full, helps avoid interest charges and boosts your score. The goal? A high credit limit but low spending.
Automate Your Financial Routine
- Automate Savings: One of the easiest ways to save money consistently is by setting up automatic transfers from your checking account to a savings account. Whether it’s for an emergency fund, a specific goal, or retirement, automating savings ensures you save regularly without having to think about it. You can start small, even rounding up purchases to save a few extra dollars each month. Over time, these small contributions add up to significant savings.
- Automate Bill Payments: Set up automatic payments for recurring bills like utilities, subscriptions, and credit card bills. This can help ensure you never miss a payment, avoiding late fees and potential hits to your credit score. Plus, automating bills can free up mental space, so you can focus on other aspects of your financial planning.
- Automate Investments: Just like savings, you can automate your investment contributions through employer-sponsored retirement plans (like a 401(k)) or individual accounts (like an IRA). Setting up regular, automatic contributions ensures that you’re consistently investing without needing to think about it each month, helping you grow your wealth for the long term.
- Start Early: One of the most important things you can do as an early professional is to start investing as soon as you can. Even if you open an account and put in $20 a month, that money will begin to accumulate! Due to inflation, money sitting out of an account slowly depreciates anywhere from 1% to 8% per year. Money in even a low-risk, low-reward account will do a better job keeping up with inflation.
Claim Your Benefits
- Employer Benefits: Many employers offer benefits like retirement contributions (e.g., 401(k)), health savings accounts (HSAs), or even financial wellness workshops. If your company matches contributions to retirement accounts, try to contribute enough to take full advantage of that match — it’s essentially free money! Additionally, many companies offer discounts on things like gym memberships, wellness programs, or financial planning services that could help in both the short and long term.
- Cashback and Rewards: Leverage cashback offers and reward points for purchases you would already make. Many credit cards, stores, and even apps like Rakuten offer cashback or rewards for purchases. Just be mindful to pay off any balance before the due date to avoid interest charges, and only use reward points or cashback on things that align with your budget and goals.
3. Distinguish Between Needs and Wants
Kiran, an immigrant to the United States, faced numerous challenges as she rebuilt her life in a new country. Her grandmother’s wise words, “Needs are vital, wants are optional,” resonated deeply during her early days in America.
Caught between adjusting to a new culture and managing finances, Kiran realized her wants were overshadowing essential expenses. This epiphany sparked a transformative journey.
To distinguish wants from needs, Kiran employed a thoughtful strategy: considering the source of joy. She asked herself, “Does this purchase bring momentary joy or lasting contentment?” This reflection helped prioritize necessities over discretionary spending.
Allocating her income wisely, Kiran adopted the 50-30-20 rule: 50% for necessities, 30% for discretionary spending and 20% for savings and investments. By automating savings and regularly reviewing expenses, Kiran cultivated financial discipline. Her grandmother’s wisdom and this intentional approach empowered Kiran to make mindful financial decisions, breaking free from unnecessary expenses and building a secure future in her new home.
Actions That Help With This Step:
Eliminate Debt Strategically
- Debt Repayment Strategies: Consider the debt snowball method (paying off the smallest debts first) or the debt avalanche method (prioritizing debts with the highest interest rates) to clear debt faster.
- Balance Transfers and Refinancing: For high-interest credit cards, look into balance transfer options or consider refinancing loans to secure lower interest rates.
Protect Your Finances and Plan for the Future
- Insurance: Make sure you have adequate health, disability, and, if needed, life insurance. Disability insurance is especially important, as it can protect you if you’re unable to work.
- Estate Planning: Set up a basic estate plan, including a will, health care directives, and, if applicable, trusts.
- Financial Planner: Consider working with a fee-only financial advisor who can help you set and meet personalized financial goals. Get settled with a person you can trust early! If a loved one dies or your financial situation changes, you need to know that the people you rely on for financial advice are going to keep your best interests in mind.
- Policy Changes: It’s important to know that your protections can change with policies and presidential administrations. Different administrations have different policies on things like interest rates and loan protection. It’s a good idea to have a knowledge of the history in the country you live in and to know the causes of large drops in the economy. Just because a financial institution says they’ll loan to you doesn’t mean they necessarily are being fully transparent or looking out for your best interests. For example, you can read how the Great Recession (2007-2008) was fueled by the U.S. housing market’s tendency toward risky mortgage lending, excessive borrowing, and the collapse of major financial institutions. This downturn had extreme consequences, including foreclosures, unemployment, and lost life savings. Staying informed about historical and current economic policies can help you better protect your finances in the future.
Keep Track of Money Sinks
- Budgeting: A good way to get a handle on your personal spending is to start keeping track of your spending biweekly or monthly. Try organizing your spending by type (housing, groceries, eating out, pet, car, etc.). Take note of the areas you have needless spending. For example, the average American spends 15% more on food delivery than dine-in, and this amount can really add up.
- Avoid Impulse Purchasing: Instead of buying immediately, start a shopping list. This can both help avoid multiple delivery costs if you order online, and also help you recognize if a want becomes less interesting with time.
Join Financial Support Networks and Communities
- Women’s Financial Communities: Communities like Ladies Get Paid, Financially Savvy Women, or Girls Who Invest offer networking, support, and resources tailored for women.
- Social Media Groups: LinkedIn, Facebook, and Reddit groups focused on finance for women can provide advice, motivation, and resources.
4. Invest – Iterate – Experiment – Advocate
Sreyoshi’s financial journey began when she received her first paycheck with company stocks, sparking excitement and trepidation. As a first-generation immigrant to the United States, navigating equity compensation complexities seemed daunting. With limited investing knowledge, she sought guidance from financial advisors who helped her grasp the basics.
They introduced her to index funds, tax-advantaged accounts like 401(k) and Roth IRA, and risk management strategies. She learned the importance of taking control — and often a good financial expert is who will help you confidently take on next steps and, maybe someday, feel empowered enough to experiment with investments on your own!
Actions That Help With This Step:
Invest for the Long Term
- 401(k) and IRAs: If your employer offers a 401(k), contribute enough to get any employer match, then consider additional contributions. Open an IRA (Roth or traditional) for additional retirement savings.
- Brokerage Accounts: Use platforms like Vanguard, Fidelity, or robo-advisors like Betterment or Wealthfront for easy access to stock and bond markets. Start with broad, low-cost index funds or ETFs.
- Investment Communities: Join communities like Ellevest, a financial firm founded by women to support women in investing and wealth building, or Investopedia for educational resources.
Build Multiple Income Streams
- Side Gigs: Start with freelance or remote side gigs on platforms like Upwork or Fiverr. Or, if you have specialized knowledge, consider tutoring, consulting, or offering classes online.
- Passive Income Streams: Explore rental income, royalties from creative works, or income-generating investments like dividend-paying stocks.
Negotiate Salaries and Advocate for Yourself and Others at Work
- Salary Research: Use sites like Glassdoor, Payscale, and LinkedIn Salary to understand industry standards and leverage this data in negotiations. Going into a negotiation with a solid understanding of what others in your job and position earn is a powerful tool.
- Have Your Deal-Breakers Ready: Go into a conversation with an understanding of what you want, what you’ll accept, and what you’ll walk away at. If you have numbers or factors in your mind, you can fall back on them if you freeze up.
- Know Your Leverage: Understand the negotiating power (or leverage) you have before you have the conversations. If the company has been trying to fill a position for a long time, you have a niche skill they need, or you have a track record of exceptional results or industry recognition, highlight these points.
- Have Multiple Offers Available: One of the most powerful tools you have in your arsenal is to have multiple interested parties. If you’re negotiating a raise at your current job or considering a new position, having another offer — or even interest from other companies — can strengthen your bargaining position. However, be mindful that bringing up competing offers can be a delicate matter. It’s important to be prepared for the possibility that your current employer might decline your request. Before using this tactic, be clear about whether you’re willing to move on to another opportunity or if you’re ready to stay, and face the consequences of potentially walking away.
- Negotiate: Practicing negotiation is key — whether it’s for a higher salary, better benefits, or career advancement. Seek out negotiation workshops or online classes, such as those offered by The Muse or Skillshare.
How Can SWE Help?
We spoke earlier about how financial inequality is a systemic issue disproportionately affecting women, particularly those in engineering. The Society of Women Engineers (SWE) recognizes this disparity and spearheads change through advocacy and education.
For example, SWE-sters influence policy through Congressional Visits and industry partnerships addressing root causes. Additionally, SWE provides resources like financial literacy courses, mentorship programs, and career development tools, empowering women engineers to break down barriers.
Through SWE’s Advance Learning Center, you can access salary negotiation guides, financial planning templates, and retirement planning guidance. SWE paves the way for systemic transformation, fostering a more equitable landscape for women in engineering to thrive financially and professionally.
Financial Fearlessness Is the Future!
Financial empowerment is our right and our dream for our collective futures. Let’s break free from financial uncertainty and work together to build a secure future. Little by little, we will learn that we are all capable and worthy of financial freedom.
