Many people are aware of the gender pay gap – women earn approximately 82 percent of what men do – but there’s a bigger problem that fewer are aware of: the gender wealth gap.
The gender wealth gap refers not to how much women make compared to their male counterparts but to how much they have. By some accounts, this figure is just 32 cents to the dollar for white women and as abysmally low as one penny for black and Latinx women.
Understanding the Gender Wealth Gap
Why is the gender wealth gap so huge?
Financial inequality hits women in myriad ways. There are exceptions, of course, but women generally:
- Spend less time in the workforce. Traditional gender roles and the fact that women often bring in smaller portions of a household income mean they’re the most likely to stay at home if needed. Less time in the workforce means fewer years to earn or build wealth. (On a related note, due to the pandemic fallout, women are still down 1.8 million jobs from February 2020, whereas men are down 1.1 million.)
- Invest less. Women tend to keep most of their money in the bank, while men invest most of theirs. As a result, women miss out on the opportunity to earn the higher returns that investing has historically netted.
- Have more debt. For instance, they pay more on average on credit cards, loans, and mortgages.
Effective financial planning can help close the gap.
Anyone – male or female – who hasn’t been empowered to start financial planning can find it daunting at first. And while society is evolving – financial confidence is increasing among women – there are still ways women can become better financial planners. Here are two:
- Work with a qualified financial advisor. Research and find the right partner to help you build the plan that works for you and your future. Be sure you feel comfortable with them, their credentials, and their specialty areas of expertise. Keep in mind as you collaborate with your financial advisor that your needs may evolve and thus the plan itself.
- Take advantage of financial literacy resources. These may include budget apps, investment programs or podcasts, online courses, and other materials.
Not only women, but everyone, can address this vital issue by:
- Using their own financial power and spending intentionally. Support women-owned businesses and invest in women entrepreneurs.
- Teaching their children to be financially responsible. Talk about money and the basics of saving, budgeting, and planning with them. Also, address negative gender stereotypes and model equity at home. Keep turning the tide toward progress and closing wage and wealth gaps altogether. It all starts with the proper first steps.
Put Your Best Financial Foot Forward
If building a career in finance – or rounding out your team to include today’s best professionals – are part of your vision for addressing financial gender gaps, contact Venteon Finance today.