4 Financial Considerations for Women in Honor of Women’s History Month
Happy Women’s History Month!
Women’s History Month is a good opportunity to highlight the progress women have made in education, business, finance, politics, and entertainment.
While women have made tremendous societal advancements, gaps in gender equality still persist both socially and economically. Women constitute more than half the global population, control half of US wealth and are expected to control two thirds of wealth in the US by 2020. Even though women have substantially increased their economic power over the past few decades, women are still not as confident or comfortable as men about their financial skills and knowledge.
According to a report conducted by the Organization for Economic Cooperation and Development, titled, “Empowering Women through Financial Awareness and Education”, women do not perform as well as men on tests of financial knowledge. While women are confident in their daily management of money, including saving, budgeting, maintaining credit and dealing with debt, they are less certain in their ability to understand financial issues related to investing and retirement planning. Those who are not as financially literate have a greater chance of mismanaging their own personal finances. With women steadily accruing more wealth and economic influence, it is important for them to become more financially literate in order to manage their money effectively.
This list below highlights a few financial issues that are unique to women and affect how women earn, save and spend money.
Longevity in retirement –
Statistics have shown on average women live longer than men and are likely to end up alone in old age (either due to divorce or death). Women in the US typically live 5 years longer than men yet earn 23% less. A longer life and limited finances can put women at risk financially. Women need to prepare for this likelihood by saving as much as possible early on for retirement. If you can hold off retiring for a few years to increase your social security benefits, do so, as this will help build up your nest egg.
Women invest more conservatively than men –
Women tend to invest more cautiously and are more risk averse than men. There is inherent risk involved in making money. While women attach more emotional weight to losing money, it is usually necessary to invest to build wealth. Consider investing in mutual funds with a proven track record to accumulate more wealth.
Value your contributions in the workplace –
Men are more likely to have higher salaries than women for the same position. The 2012 Census Bureau reports women earn 77 cents for every dollar men earn for equal work. While income disparities between women and men may be attributed to women opting for more flexible work schedules to focus on family, many women also have a tendency to undervalue their credentials and accomplishments relative to men, which can contribute to unequal pay. Be mindful of your qualifications and achievements and do not discount your own worth as a female employee. Your contributions are equally as valuable as your male counterparts.
Prepare for higher expenses –
Research suggests it costs more to be a woman a little over $1300 more a year. From haircuts to loans to health insurance, companies have been known to impose the “woman tax”, an indirect cost to women for goods and services they specifically need and use. While the higher costs of certain health services as part of an insurance plan may be inevitable, you can choose different hygienic products, such as men’s shaving cream to cut down on costs of similar higher priced goods.
Women’s History Month is a great time to celebrate the achievements of women and look to better for the future. Women have made much progress professionally, personally and financially, but there is still more work to be done! It’s crucial that women prepare for the future to preserve their financial well being and teach the next generation of women to build a greater base of financial knowledge to take ownership over their personal finances and amass their own wealth. Take the time to evaluate your finances and find ways to invest in yourself financially and professionally.