Women face many challenges where money, financing, investing and earning are concerned. The pay gap, children, work-life balance, and having to fight harder for the same career advancements and raises that come easier to men: these are just a few roadblocks that women face every day. How can women meet these challenges and overcome them?
We’ve spoken with numerous bloggers and asked them for expert advice on how women can get ahead in an often imbalanced world.
A particular challenge that women face when saving and earning money is the child rearing years. Many moms decide to stay at home, but even moms who work have childcare expenses, so during the child rearing years, it is more of a challenge to save money. The best way to overcome this is by starting to save early before you have children as much as possible and making sure to keep saving as much as possible when you are able to, again to help make up for the dip in earning and saving.
It can be very tempting, in the moment, to be offered by the sales clerk ringing up your purchase to open a new credit card with that store, in order to get instant savings for that one-time purchase. What women should realize is that credit cards offered by retail stores often have high interest. Also, the very act of opening a store credit card lowers your credit rating. Pass on these credit cards. The savings is not worth the hit your credit card score will take. Also, it’s a slippery slope to taking on high interest debt.
Having a family makes it difficult for women to earn money and save it. When you choose to have a family, it is harder to balance a career with raising your children. If a woman wants to have a career while she has children at home, she needs to decide who is going to raise those kids. Will dad stay home? Will they rely on daycare? How much will that cost? Most jobs for women do not cover the cost of childcare if you have more than one child. The best options to overcome that is to either wait until your children are grown before going to work, start a family later in life if your career is that important, or find a job where you can work from home. If the husband makes enough money to cover all the family expenses, then women can choose to stay home with their children.
The biggest obstacle for American families when trying to save money is debt. My advice would be to get rid of credit cards and pay off your student loans as quickly as possible. Don’t purchase a new car unless you are able to buy it without taking out a loan. Make sure your family’s income is greater than your expenses. If your bank allows it, schedule automatic transfers to your savings account each month.
As a work from home mother, the biggest challenge I face when trying to earn money is finding time to run my business whilst simultaneously minding my children. I do not have childcare readily available, so I’ve had to adapt my work schedule to fit around the children. I try to work while they nap, while my eldest is at school and if I have the energy, at night while they’re in bed. It can be tough trying to run a business and be your children’s primary caregiver – the constant interruptions during the work process can take a lot of getting used to, but I’m glad I’ve found something which has allowed me to make an income from something I love doing, and which also allows me to be at home with my children.
When it comes to saving money, the biggest challenge I face is that my work invoices can take anything up to 60 days to be paid, therefore, I never really have a disposable income and everything has already been assigned for a bill, trip, expense, etc. before it even arrives into my bank account. I have, however, set up a direct debit into my savings account so that I never physically get to manage that money, therefore, I don’t miss that amount. I don’t assign it for anything, and having it go straight into a savings account means I don’t go looking for it, and slowly but surely my savings are starting to build up.
One challenge women often face when saving and earning money is putting themselves and their needs last, while taking care of others first. Instead, they should automate their finances to “pay themselves” too. By creating a fund for their “future self,” they can save and invest for their retirement years and bucket-list dreams. This is not only important to do for themselves, but it’s also a wonderful gift to their loved ones when these women are financially independent and not in need of their financial support later.
There are numerous systemic issues that have a negative impact on women’s finances and those can be hard to combat on a small scale, but that doesn’t mean there isn’t something that can be done. We’ve all heard about the wage gap, but how are we supposed to fix that on a personal level? Ask for that raise!
Research has found that while women are as likely to ask for raises as their male counterparts, they are less likely to get them. To ensure you have the best chance of getting the salary increase you deserve you need to be prepared. Do research on what typical salaries for your position are, and talk to those in your field. Discussing salaries can be uncomfortable, but it’s also one of the best ways to counteract the wage gap. Go into your review meeting with evidence of why you deserve a raise. Bring examples and testimonials about successes you’ve had, and highlight what an asset you are. The more vital you are to your team the better chance you’ll hear yes. Finally, it’s not all about the cash. If you know a salary increase is off the table, then consider asking for something else that will improve your work life. Maybe that’s more vacation time, or working remotely, or better health benefits. All of these ideas have value, but sometimes it’s easier for a company to offer non-monetary rewards.
In my opinion, the biggest challenges women face when saving and earning money come in two forms: Image and Career.
Oftentimes, when it comes to appearance, women feel more pressure than men to look good. Instead of being able to shave their heads and wear T-shirts, women feel the need to spend exorbitant amounts of money on having their hair colored and styled and sporting the latest fashion trends every season of the year.
It’s also no surprise that women typically earn less money than men for the same work. In addition to earning less and spending more on appearance, women often take a few years off to raise small children which ends up netting a big financial discrepancy that has the potential to significantly reduce women’s ability to save and earn money over a lifetime.
So, what’s the solution? First, knowledge is power. Just being aware of these societal expectations and inequalities puts women far ahead of the curve. There are always less expensive alternatives to achieve the same end. Shopping at consignment stores for high-end clothes, or sharing with friends, eliminates huge clothing expenses. Skipping the highlights and opting for less expensive makeup can save hundreds of dollars each month.
When it comes to earning just as much money as male counterparts in the office, negotiation is key. This is especially true during the interview and job acceptance process. It’s also possible to just ask for a raise. But, asking for a raise isn’t enough. Asking for a raise and backing it up with facts about why it’s deserved, should be. If it’s not, it might be time to find a new employer.
Being mindful of how important it is for women (who typically outlive their male partners) to earn and save more money can eventually lead to changes in behavior that can, in turn, lead to healthier and wealthier lives.
Often, women think that they have a spending problem, when, in actuality, the issue is that their life doesn’t support their ability to save money.
When your sink is full of dirty dishes, it’s hard to save money by making dinner at home. But when you have sports practice 4 times a week, and you and your spouse both work, it’s hard to get those dishes done so you can actually cook.
And I see this in almost every aspect of women’s lives. There is so much responsibility and so much to be done between running the home, raising your family and trying to stick to a budget, that without a naturally organized personality or some serious life skills training, it’s difficult to change your habits enough to save money.
The best way to change is to work with your personality and not against it and not to expect yourself to suddenly have iron willpower.
Use incentives to teach yourself that the only way to get what you want is by doing what you need to do. I do this by reserving 20% of the amount that I come in under budget in every category to splurge on whatever I want. Then, the additional 80% goes to savings. This has funded Hobby Lobby trips, Target trips and even vacations, all while saving more money than I ever could have alone, without the incentive.
One particular challenge that women face is balancing how to save for retirement. There are a number of different factors and pressures that impact how women think about saving for retirement including that women often live longer than men, they earn less than men and they are often responsible for caregiver duties, which can cost them extra time and money.
A decline in financial confidence can also make saving and earning challenging for women. In the recent Allianz 2019 Women, Money and Power Study, we found that women are struggling to make progress with financial confidence and decision making. This includes a decline in the numbers of women who say they are the primary breadwinner, say they have more earning power than ever before or say they are the CFO of their household.
In addition, over half of the women (57%) say they wish they were more confident in their financial decision making. That can really weigh on women as we create strategies for saving and earning.
One of the most important ways to deal with these challenges is educating yourself, and building a regular and ongoing retirement savings strategy. A financial professional can help provide information, education and support to build a plan for saving for retirement, including exploring protection opportunities, exploring the benefits of various retirement savings vehicles, creating a strategy for taking Social Security, and learning to manage health care costs.
One specific challenge that women face when saving money toward retirement is that they have a longer life expectancy than men (on average, between 6 to 8 years longer). This means that not only do they typically earn less throughout their career, but they need to save more towards retirement in order to make their nest egg last.
To overcome this, you can do a few things. First of all, if you’re coupled up, then you want to make sure you are the beneficiary of retirement funds and other assets in the event that your partner passes before you. Sit down with your partner about this situation, and have “the talk” to clearly figure out what’s going to happen if, and when, they pass. And if you’re single and otherwise responsible for your own retirement savings? Something to try is to negotiate with your company is a higher matching contribution to your 401(k) retirement account. This can work well, especially if they won’t budge on paying you more, because companies get tax benefits for contributing towards their employee’s retirement.