In honor of Women’s History Month, we recently wrote about natural advantages women have that can help them manage personal finances.
Today we’re talking about the other side of the coin—disadvantages that women need to be aware of when dealing with money matters.
Like we wrote before, we don’t want to stereotype anyone, and every woman is unique, but these general statistical trends are important things to be on the lookout for.
Wage Gap– on average, women earn less than men. Why that gap exists is a matter of often-heated debate, but the fact of its existence isn’t disputed.
What to do– While the wage gap is a subject for society as a whole to address, in the short term, individual women need to focus on budgeting. We talked in last week’s article about how women are more likely to keep a written journal, and that’s the place to start. Track spending in writing and use that data to create a new written budget.
Price Gap– products designed exclusively for women are more expensive than those meant for men, women’s clothing is more likely to need dry cleaning, and women have to purchase things like cosmetics that men don’t use. All of these expenses add up to a hefty price gap between the genders. Studies have also shown that women’s health care is more expensive than men’s, even when exhibiting the same symptoms.
What to do– Again, budgeting is essential. Comparison shopping is also a must. We’ve learned that the number one form of overspending isn’t buying on impulse, it’s paying too much for things. So look at your necessary spending and see if there’s anything you’re paying too much for that can be bought cheaper from another source, or in bulk.
Long-Term Care– some of these categories seem especially unfair, in that they represent admirable qualities that nevertheless result in financial challenges for women. A Princeton study found that women are twice as likely as their male siblings to end up caring for an elderly parent. And a study from the Journal of Applied Gerontology found that women are more likely to be displaced from the workforce when providing long-term care.
What to do– The best solution is to plan well ahead and get some kind of long-term care insurance to meet this need when the time comes. Every family situation is different, but if you think this kind of situation is likely, that insurance is more likely to be worth it. And your whole family needs to come together and decide if they are going to buck the trend and share caregiving responsibilities equally among siblings.
Charity– another category that turns a positive into a challenge; women are more likely to give to charity than men, and on average they donate more.
What to do– Donating to worthy charities is great, so we’d only caution you to make charitable giving part of your written spending plan so you don’t go overboard. Think of when you’re on an airplane; they tell you in an emergency to put the breathing mask on yourself first, before helping the kid sitting next to you. The same principle applies here. You’re no good to charities or the needy if you can’t make ends meet yourself. Check out our article on Charitable Giving On A Budget.
Education– yet another positive trend that ends up costing women more money. These days, women are more likely to attend college than men. That’s good—it’s part of how society is addressing the wage gap—but with tuition costs skyrocketing in recent decades, today’s graduates are left with hefty student loan debt.
What to do– Student loans are a huge headache for graduates everywhere, men and women alike. We offer StudentDebt.org for individual assistance. Also, check out our student loan articles here on the blog.
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined credit.org in 2003 and has over two decades of experience in the industry.
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