Sara Jónsdóttir, the founder of Revol Cares, a Vancouver-based business that makes period underwear, says as a small business owner she had to learn quickly about managing and investing money.Supplied
Chantel Chapman was running a financial literacy business, teaching others how to manage their money, but found she couldn’t always follow her own advice.
“I was people-pleasing with my money, and couldn’t negotiate on my behalf,” says Ms. Chapman, who describes herself as a trauma survivor. “I was always over-spending to get acceptance.”
She came to realize her past experiences were affecting her financial approach.
“I started to see the relationship between my lack of boundaries, my self-worth, and my desire to chase security through money – but not being able to keep it – and this trauma I had gone through,” says Ms. Chapman, who lives in Tsawwassen, B.C., about an hour south of Vancouver. “I started going to trauma therapy, but every time I brought up money, they’d say, ‘Have you tried budgeting?’ "
Ms. Chapman set out to create education around financial psychology that she couldn’t find elsewhere. She founded The Trauma of Money, which teaches professionals working in mental health, human resources and finance about topics including how financial scarcity affects the brain.
“There’s so many reasons why someone might have blocks and not want to move forward with investing,” she says. For those who have lived with scarcity, “that person becomes hyper-focused on whatever they feel is scarce and they have a very hard time to do anything that comes with long-term goal planning.”
Women, on average, make less money than men, take on more family responsibility and often don’t manage their own finances, which can put learning to invest fairly low on their priority list – even more so for those who are struggling financially, or who have faced or are dealing with other tragedies or trauma.
But despite the fear that can come with looking plainly at your monetary situation, experts and women who have taken control of their own financial reins after hard times say there’s peace of mind to be had from understanding money and having an investment plan – even if the projection isn’t picture-perfect.
“The best time to start is now,” says Shannon Pestun, a business-finance expert who was motivated to learn about money after dropping out of high school and living near the poverty line. “There is always time to catch up, but the younger that we are, the more financial strength we will have as we get into our later years.”
Shannon Pestun, a Calgary-based business-finance expert, says she was motivated to learn about money after dropping out of high school and living near the poverty line even though she was working at two retail jobs.Supplied
Ms. Pestun, who grew up in Treaty 7 territory in southern Alberta and now lives in Calgary, worked two retail jobs at once before returning to high school at age 21 thanks to the support of a boss.
“I had tasted and lived what it was really like to be paycheque-to-paycheque and not able to afford anything other than rent and food,” she says.
Once she began educating herself about finances, she says she realized she had a much greater capacity to understand the topic than she thought. She encourages women to seek out other women as mentors or financial advisors, noting the financial system remains “paternalistic” in many ways and can deter some women from starting on the path to build wealth.
“It’s a powerful realization when you know you have both financial security to meet the must haves but also to have the freedom of choice to use your money in a way that is personally meaningful,” says Ms. Pestun, who is Métis, and who started a bursary for Indigenous women studying business or entrepreneurship at Mount Royal University.
Kristine Beese focuses on these choices in her business, Untangle Money, a financial planning platform aiming to “get a financial plan in the hands of every woman.”
“We know that people who have a financial plan are more than twice as likely to get to their financial goals,” says Ms. Beese, a former portfolio manager, stock analyst and engineer based in Toronto.
Her team shows clients “a bunch of scenarios,” using direct language without financial jargon or judgment, she says. If they aren’t on track to meet their goals, she encourages them to either reduce their base-load – the money that is already committed each month to things such as rent, food, and subscriptions – or increase the risk of their investment portfolio, which she strongly encourages if the money won’t be needed for at least 10 years.
Ms. Beese says research shows women are “unbelievably incredible with money. We save more than our male compatriots,” despite earning less. When it comes to investing, she says women are more likely to “set it and forget it” with their investments, a money-saving strategy that avoids fees incurred by trading frequently.
“Investments are like a bar of soap: the more you play with it, the smaller it’s going to get. Women don’t play with the bar of soap very much.”
For Sara Jónsdóttir, the founder of a small business, investing has taken a different form.
“I am betting on myself,” says the founder of Revol Cares, a Vancouver-based business that makes period underwear. “I am 100 per cent invested in my business.”
Those stakes made financial education extremely important when an investor tried to take over several facets of the business last year, bringing in his own people to manage the books, do the taxes and banking. After realizing how little insight she had left into the company’s finances, Ms. Jónsdóttir embarked on a self-education quest that involved hiring someone to teach her about financial software and watching endless YouTube videos on accounting, business finance and related topics.
She has since managed to part ways with that investor and is the company’s interim accountant. “As a business owner, the way I personally invest is in my learning and personal growth,” she says.