The gender pay gap gets a lot of press in the news these days: the fact that women are paid only 78% of what men are. But there is an even bigger gap which needs our attention: the gender wealth gap. A woman’s net worth or wealth (defined as assets minus debts) is less than 50% of what her male counterpart has.
LESS THAN HALF the wealth of men, yet we live longer so realistically need more money – a fact that disadvantages us even further.
Why is this? Many of the reasons are the same as those behind the pay gap, including time out of the workforce to have children resulting in stalled careers and promotions, or even a complete halt or exit from our careers. But it doesn’t stop there, we are also much more likely to bring an aging parent, or adult child, into the home for care – further derailing our career efforts AND costing us more money in the long run.
There is an additional contributor to the wealth gap, and this is that women are lacking the financial education and experience of their male counterparts. We see this in various reports that women don’t invest at the same rate as men, or that we don’t take the same amount of risk as men when investing thereby short changing our investment returns and wealth. Some of this is due to career choices – men enter financial careers at a much higher rate than women. Some of this is due to lingering tradition and stereotypes where men are often the breadwinners and therefore control the finances at home. And of course, some of this is due to the pay gap which provides us less earnings to contribute to our nest egg than our male friends get.
Girls, we MUST change this for ourselves and for each other. Even more critical than the pay gap, we need to narrow this wealth gap. More specifically, we need to better take charge of our finances whether it’s advocating for higher pay or more responsibly and strategically investing our money. It would only be fair for us to flip the wealth gap to have more than men given that we live longer and have others (aging parents and adult children) to tend to.
Got it – women need more wealth! But how?
I have one major tip here: save more. Wealth really does come down to how much you pay yourself by saving. Now I know that this is not news to any of us – we all (men included) know that we need to save. If this were easier, then we wouldn’t have a problem and a wealth gap, would we?
Here is the real advice behind the tip: paying yourself (before you give money to the government or anyone else) is easy when you make it the first thing you do. Most of us aren’t getting ahead as quickly as we want or as fast as the boys because we are managing our money with the wrong order of operations. We’ve been taught to spend first, then save what’s left. Without Herculean discipline (budgeting and tracking) we spend more than we ought to and have little or nothing left to save. BUT when we save first we get that taken care of right up-front. Then, we spend what’s left. Don’t we tell our children (and ourselves, for that matter) to do chores first before playing? Or to eat dinner before eating dessert? The result of these orders of operation are productivity and nourishment, then followed by reward. Let’s approach our finances in just the same way! Save, then spend.
Also recognize that I’m not suggesting we “mind the gap” or restrict our spending, although spending what’s left does mean spending only that much. Let’s strike a balance in our lives where we make sure to both SAVE and SPEND. With the previous order, the only certainty was spending, saving was a hope.
(Watch out, boys…here we come)
Oh, and you can share this with the men in your life too. I’ve aimed this post at women simply because we need it even more.
If you’re ready to more easily build your wealth
and to encourage other women to do the same, join us!
Sign-up at