Why women need to be wealthy and what we can do to get there
Originally published on Forbes.
At age 25, I was a graduate of Wharton with a new and promising career in investment banking. To some, it might have seemed I was doing everything right, but to me, it felt like just the opposite. I was working long hours in a job I didn’t love, and as a result, everything else felt off track, too. I was completely out of shape, dating the wrong men, and generally feeling pretty lost. After some soul searching, I decided to leave my job for another finance position.
I was happier in my new position, but I also took a pay cut. I was bleeding through my savings and knew I had to get a hold of my finances. Despite my background, I knew nothing about my own money. As a result, I was making mistakes in just about every area of my financial life and knew something had to change.
My story is not unique.
I set out to find answers and get my financial life on track. When I started along my money journey, I noticed that a lot of the information available was dense and boring, and resources were mostly by and catered to older, white men. I wanted to change that. I started a blog to share what I was learning, and then others started reaching out asking for help.
The facts.
Almost half of adults say they could not cover an emergency expense costing $400 without selling something or borrowing money, at any age.
25% of non-retired adults have no retirement savings or pension whatsoever. More than 25% of adults skipped necessary medical care in 2017 because they couldn’t afford the cost.
Through my work, I’ve found that everyone struggles with money. Regardless of our relationship status, where we live, or even how much money we make, it’s a universal pain point.
Because talking about money is taboo, even among close friends and longtime colleagues, it’s not always obvious how pervasive money-related stress is.
Us women have it worse.
Let’s start with the gender pay gap.
In 2017, women earned 82% of what men earned. Black women, Native American women, and Latinas are much worse off, earning just $0.63, $0.57, and $0.54 (respectively) to the white man’s dollar. That means Latinas would have to work an extra ten months to earn what their male counterparts did in 2017.
Then we have the pink tax, where the things we buy cost us more than the same products created for men. Women (and girls!) pay more for just about everything. Target was under fire after charging double for a pink version of two otherwise seemingly identical scooters. We pay 7% more for toys and accessories, a whopping 13% more for personal care products, and we’re even charged more for our dry cleaning.
Not only are we earning less and spending more, but we’re also investing less than men. The gender investing gap is real — women invest less than men, even though we’re better at it when we do (go figure!) That, coupled with the fact that we earn less and live longer, puts us at a huge disadvantage when it comes to becoming wealthy, reaching our financial goals, and funding our retirement.
What would happen if women were financially well?
Not only are all of these facts frustrating and disappointing, but the repercussions are huge. If we are financially well (imagine a nice savings buffer in our bank accounts), we can negotiate harder to be paid fairly at work.
We can leave relationships and jobs where we’re being mistreated. We can take more risks in our careers without worrying about the financial implications. We’d see more women on boards and management teams.
More diversity means more productivity, less turnover, and higher bottom lines. When women are wealthy, they invest more of that wealth back into their families and communities.
It’s critical for all of us that women become wealthy.
What can we do about it?
Always ask.
Women are four times less likely to negotiate their salaries than men. Find out what you should be earning and then ask for it!
Automate.
I’m a big fan of making our financial lives as easy as possible. When we automate our saving and investing, we can rest assured that it’s actually going to happen. We don’t have to remember to do it, and we don’t have to worry that our expenses will take up the money we planned to invest. Set up an automatic transfer after each paycheck that goes through to your savings and investing goals.
Start investing!
Because there’s so much information out there about investing, it’s hard to know where to start. It’s common to be afraid of losing our hard-earned money, but we lose so much more by keeping our long-term savings in cash, which actually loses value over time. We learn by doing, so do a little research (put a time cap on it!) and get started.
