Angela Hattery, PhD
Professor of Women and Gender Studies at the University of Delaware
What unique challenges do women face when it comes to their finances?
Women are often told that they don’t know anything about money or that they aren’t smart enough to learn. That’s nonsense! You don’t need to become an expert, but you do need to educate yourself so that you have a basic understanding of how investing works and what you can expect. One book I have found to be especially useful in both learning the basics and managing your expectations and goals is “Your Money or Your Life 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence” by Vicki Robin and Joe Dominguez. Learn everything you need to know to be a partner with your financial advisor. In the end, no one cares about your money as much as you should.
What career advice should women follow to make sure they are maximizing the amount of money they earn?
Even in 2024, women still earn less than men. According to the Institute for Women’s Policy Research, women earned, on average, only 84% of what white men earn. The statistics are even more grim for non-white women; Black women earned, on average, 65% of what white men earned, and for Latina women, the figure was only 59%.
They also note that the gendered wage gap, though it varies by occupation, persists across all types of work, stating “Women were paid less than men for full-time work in all of the 20 largest occupations for women and in all of the 20 largest occupations for men. The gap in earnings in women’s largest occupations ranges from 28.7 cents less on the dollar paid to men financial managers to 2.3 cents less on the dollar paid to men cashiers.”
Further, women have a longer life expectancy than men. Women are expected to live to age 80, whereas men’s life expectancy is seven years shorter, at only 73 years on average. In sum, women will earn less over their lifetime and live longer. Thus, they must find ways to make their investments work for them if they are going to have enough to take care of themselves in their final years. Investing is indeed much more important for women and must be taken far more seriously.
How can women take their first steps into investing?
First, understand that it is critical that they do start. As any financial advisor will say, the key to investing is the long game. Women must start investing as soon as they have a paycheck. Not as soon as they think they can, or as soon as they have some extra money to invest. They must start immediately. Even 5–10% of your paycheck, invested when you are 22 or 23 years old, will grow exponentially by the time you retire and/or need end-of-life care. You simply cannot start too early. A financial advisor can help determine the percentage of your salary that you should aim to invest given your goals for retirement and your expectations for big expenses like purchasing a home, sending a child to college, and having the resources to take care of yourself at the end of your life.
Second, find an investment advisor that you trust. You don’t have to become an expert in investing, you simply have to commit to doing it and find someone who has the expertise to advise you honestly. Finding an investment advisor you trust may be a bit like speed dating, you may have to interview a few before you find one who meets your goals, needs and personality. Also, don’t be afraid to change advisors if you are not getting what you want. They are helping you manage YOUR money. If they are not working for you, find someone else.