Financial Independence is a broad term which can be generally described as being able to support yourself financially and the ability to earn enough money to cover your monthly expenses without having to depend on another person. For a woman being financially independent generally means that;
(a) you have a job or you are self employed or you have a source of income; which means that you get a monthly salary or earn a profit from your business or you have income generating investments.
(b) you are knowledgeable about personal finance and money management; which means you know how to budget, save and invest money.
(c) your finances are not dependent on another persons salary or capacity to earn.
(d) you are in control of managing your own finances; which means you have the discretion to decide how much you spend, how much you save and how you invest. Those decisions are not made under the direction or authority of another person.
Why should women be financially independent?
1. To off set the Cost of Living
It is clear that in today’s day and age it is becoming increasingly difficult for a single person with one income to support an entire family, no matter how frugal you are. It is also unfair and unreasonable, in today's economic context, to expect one person to undertake the entire responsibility of supporting the family. Having a secondary income will help take the financial stress off the primary breadwinner and it will reduce any conflict as between you and your spouse when it comes to money. Therefore, it is important for women to earn an income to be independent and to support her family.
2. To prepare for an emergency
If your family is relying on one income, you might be put in a precarious position if the primary breadwinner has some medical emergency or looses his job. To have a secondary source of income at such a time, will be a blessing. It will help you to pay for the basic necessities and keep a roof above your head. It will reduce the stress relating to financial matters and give you peace of mind knowing that you are able to look after your family’s needs.
3. To look after your parents and pay for kids expenses
Women who are financially independent can easily look after any emergency medical and other needs of your elderly parents without being a burden or putting any strain on the family’s finances or having to ask for permission from their spouse. You can spend for your children’s expenses without having to constantly ask your spouse for money.
4.To be your own knight in shining armor
Being able to earn a living, to manage your money, to save and to invest on your own, will help you to advance in your career and in life. You will not be treated as a dependent and you will not have to rely on your husband or your parents for money. It is important that women know and understand that they are capable of managing their own finances and they take the opportunity educate themselves about personal finance.
5.To be able to set and achieve future financial goals
When there are two incomes in a family, you will able to save for retirement faster, save for a down payment for a house, pay off the mortgages faster, save an emergency fund and increase the chances of getting approval for home loans. Both of you can work towards common financial goals for your future and to secure financial stability for yourselves and your children.
6. To have your own spending money
7. To gain self confidence
8. To pay for higher education for yourself and your kids.
9. To have the freedom and the ability to make life decisions on your own terms
Being financially independent will help you to make decisions for yourself without being influenced and controlled by anther. When you are financially independent you can take up a new job, change careers or launch your own business. You have the freedom to take a risk. You are not dependent on another person to take care of you (and your children) financially. You are only accountable to yourself on how you save and invest your money.
10. To have a clear knowledge of the family's financial situation.
It is important for a woman to have a clear knowledge of financial assets and liabilities of her family. This includes knowing the amount of debts such as mortgages and vehicle leases, what assets are in her name, and the various tax liabilities. It is important that she knows the bills which have to be paid in a monthly basis and online bill payment passwords. Therefore, in an emergency she is able to pay any bill without having the aid of her husband.
11. You have ability and the option of moving on
Sadly, not all marriages and relationships work out. The situation will become much worse if such breakups involve emotional abuse or domestic violence and the abusive partner has complete control of the family's finances. If you have stable income you are capable of removing yourself from an abusive relationship or marriage. You can think of your safety and the safety of your children and take a decision to move out to a different place. If the woman has no source of income to support herself and her children, she might have no other choice than to stay in the abusive relationship. If you are financially stable you can take yourself (and your children, if you have any) out of that abusive situation since you are not dependent on your spouse’s income.
Therefore, it is very important that women become financially independent regardless of their age, their marital status or their occupation.