What Is Financial Feminism?
For years, women have had the financial odds stacked against them, and 2021 was no different: systematic oppression, gender stereotypes and lack of education (among many other factors!) have led women to earn AND save less money. This puts single women, divorced women and LGBTQ women at a major disadvantage, and adds another layer of difficulty for married women in unhappy or abusive marriages to leave.
Financial feminism is all about taking back control of your finances, building a financial foundation and taking up space in the financial world so you can live the life you want now and into retirement. The goal is to attain financial freedom, which gives women the opportunity to make their own decisions with the money they’ve earned. Do you want to have a child? Would you prefer to travel the world for five years? With financial freedom, you can make these decisions without being dependent on someone else’s money.
So, how can you take back control of your finances? Read on.
Why should you care about financial feminism?
Well-managed finances are often the key to success in any adult’s life. Navigating the financial sphere, like paying off bills, saving for retirement, paying taxes, and managing your day-to-day expenses, is already difficult enough as it is. Dealing with gender-specific financial struggles on top of that can make it even more confusing, frustrating and unbearable.
Financial feminism is all about addressing just that – and more – by empowering women to make their own financial decisions. Women are generally paid less than men, we already know that. But they also may lack the financial literacy skills and confidence to invest and save money, level up in their careers, and manage their finances.
Financial literacy starts at a young age, and several studies have proven that the inequality starts young: boys receive more allowance than girls growing up – often for less work. That disparity continues into adulthood.
According to the Global Gender Gap Report 2021, women still earn only 86 cents to a man’s dollar for a similar role. In fact, in the U.S., women earn less than men in nearly all occupations. And the pandemic has set back women’s labor force participation more than 30 years, which will undoubtedly have a big impact on women’s collective financial freedom.
Furthermore, women tend to live longer lives than men. Researchers in Germany estimate that 75% of women aged 35 to 50 are at risk of poverty in old age because they are not adequately preparing and saving for retirement.
The long and the short of it? Women earn proportionately less than their male counterparts, and lower labor market participation and other systemic biases compound that effect. As a result, women are far less likely to invest and build wealth over the course of their lives.
Unique Financial Challenges Women Face
Women face unique challenges when it comes to building a successful financial future.
How many times have you been told that it’s rude to talk about finances? Or ask about how much your co-workers are making? From a young age, women are taught to keep quiet about finances. In fact, they’re taught that even asking about finances is rude. It’s a deeply ingrained concept rooted in sexism.
It’s no surprise that women adopt feelings of shame around money and finances that follow them into adulthood. But if women never talk about finances, how can they get ahead? How can they learn and grow? Concepts like pay transparency and open discussions about topics like the wage gap, literacy gap and retirement gap have only recently started picking up speed. In the meantime, the best way to overcome this shame is to shift your perspective.
“When you are clear on your values and you know your own worth, and what you bring to the world, it’s easy to talk about money. Because money is just an expression of your values,” Kim Constable, CEO of The Sculpted Vegan, told Forbes. Money – or the way you use it – can certainly be an expression of your values. For example, do you put your hard-earned paycheck into a retirement account because you value safety and security? Do you buy clothes to make yourself feel better emotionally? Consider taking some time to reflect on the ways in which you use your money and whether it aligns with your ideal values. ?
Lack of understanding
How many times have you started a conversation with someone about the stock market (or, rather, get dragged into a conversation by someone who thinks they know all about stocks 😉 ) only to feel like you don’t understand what the other person is saying? The stock market comes with its own set of jargon and vocabulary, and most people aren’t taught what words like “short” and “mutual fund” mean. And wealth managers with bad intentions will often hide behind jargon to make themselves feel more important by making you feel like investing is something you’ll never understand.
The first step to becoming more comfortable with the world of investing and finances? Understanding that although it may seem scary or intimidating, in reality, it’s a lot more straightforward than a lot of us originally thought.
“Anyone can learn about adding a mix of stocks and bonds,” Stacy Francis, president and CEO of wealth management firm Francis Financial, told CNBC. “It’s not about choosing a hot stock or the best investment. It is a lot more boring than people believe. You choose an ideal asset allocation, and stick with it.”
The truth is that women have all the behavioral traits to become great investors to set up their financial future. It’s okay not to know everything about the stock market – sometimes, you just need to get started and figure it out slowly, or enlist the help of an advisor you trust.
Lack of guidance
Women don’t receive the same financial advice and financial guidance as men, making it more difficult for women to achieve financial success later in life. Most women growing up don’t receive enough education or encouragement about finances. That means they may be offered more expensive financial products when they do see a financial advisor. It can also mean receiving less education about financial investing and budgeting.
“Financial education can be daunting. There are a million ways to earn a million dollars, but where does one start as a woman in business? Can financial advisors be trusted, or are they quota and commission-driven? We can take control of our financial future and the best place to start is by educating ourselves,” Jodi Vetterl, the CEO and founder of Beyond the Banks Academy, told Forbes.
Why is financial independence important for women?
When you manage your own income and plan for your own financial future, you have far more power to decide on your own choices in life. Are you wanting to have a baby? Do you want to travel the world for five years? Do you want to focus on your career? Do you want ALL of these things? These life choices can change the course of your life, and finances give you the power to make those decisions for yourself. You do not have to be dependent on someone else’s money if you don’t want to – even if you’re married.
It’s especially important because the financial inequality between men and women continues throughout their whole lives. And, over the course of their lives, women often end up with less retirement savings than men despite living far longer. According to a 2016 study by the National Institute on Retirement Security (NIRS), the median household income of women 65 and older was $47,244; however, for men, it was $57,144. In other words, retired women had 83% of the median household income as men the same age.
How can you take control of your financial future?
Financial feminism helps tackle the systemic institutions by engaging, educating, and encouraging more women to take back control of their finances. Here’s how you can join the movement:
It’s okay not to have all the answers. In fact, women consistently lag behind men in financial literacy, and it impacts their ability to make better financial decisions. That means women feel more intimidated by investing, retirement planning, and wealth building. Research shows that one third of the gender financial literacy gap can be explained by women’s lack of confidence. “When it comes to financial literacy, women know less than men, but they know more than they think they know,” the paper concludes.
It’s all about being fearless, and that comes down to confidence. So how do you build confidence in the financial world? Try these tips:
- Invest small amounts of money in the stock market, so you learn by doing
- Educate the younger generation about financial topics early. This is so important if you have children!
- Ask your friends and family what they might be doing
- Ask for professional help
Talk about money
As I’ve mentioned previously, many people are taught from a young age to avoid conversations about money, and that’s especially true for women. That means how much you make, how much your coworkers make, how much you budget… The list goes on.
According to the Ellevest Financial Wellness Survey 2021, only 14% of women said they regularly talk with others when looking for support and guidance. In the same survey, nearly half of women (45%) reported that talking about money helps them feel more supported, reduces stress (41%), and makes them feel more informed about their own financial decisions (39%).
It can be really difficult to talk about money, especially when there’s so much shame and secrecy surrounding the topic. It’s not normalized. That’s why it’s so important to keep speaking up and talking about money.
When you start talking about money with your friends, coworkers, family, and partner, you understand what’s possible and what’s not possible. (Did you know that couples that openly discuss their finances report being far happier?) You may learn you’re being underpaid, or that you can reimagine your budget in a different way. Or maybe you’re reminded to start focusing on saving more. It doesn’t have to be awkward, and the more we normalize having conversations around money, the less uncomfortable it will be.
Surround yourself with positive influences
You may not feel comfortable speaking with friends or family yet. That’s okay. One thing you can do right now is start surrounding yourself with positive financial role models and financial educators, both online and offline. For example, social media influencer Tori Dunlap, the woman behind Her First 100K, offers online advice to women specifically to help them learn more about setting themselves up for success. Another financial educator online: Bola Sokunbi of Clever Girl Finance. Surrounding yourself with these voices will help normalize talking about money, investing, and building wealth.
Speak up at work
For so many people, the discussions about money begin at work. The more you can improve the situation in your own office, the better you make it for all your fellow women. If you feel like you’re in a position to speak up at work, consider advocating for things that will help women in your office, like paid family leave, more vacation time, flexible working policies, and more.
It also means speaking up for yourself. Advocating to be paid the same as your male counterparts can be difficult to navigate. You may even feel like you have a case of imposter syndrome. But, the truth is, negotiating at work can make a big difference.
If you feel like you could improve your negotiation skills, I highly recommend AAUW’s free online salary negotiation course. You can access the course here.
Have your own accounts
Whether you’re married or living with your expenses mixed together, consider having your own financial accounts. You can still contribute to the household expenses while managing your own money. Having your own account not only helps with feelings of self-worth, it can also help you in the case an emergency arises. Even if you have a strong relationship, it’s important to keep at least one account of your own.
Understand how you spend money
Everyone has their own way of managing their finances. Many people learn how to manage their money by watching their parents or their friends. Our family story and experience plays a big role in how we learn to handle our own finances.
Understanding how you spend money can be key to building a successful financial future. For example, if you know you overspend on certain expenses, you can take steps to curb your habits or regulate them. Knowing your own strengths and weaknesses can help you better manage your money. Being mindful is key. At the end of the month, make sure to track your progress and understand how you can improve.
Have individual goals
Women should always have their own financial goals, no matter their relationship status. Your individual goals and your goals with your partner can help you get ahead in life, whether that means paying off your student loans early or setting aside money for your child’s future.
Are you curious to learn more about financial feminism? Are you interested in learning how you, as a woman, can manage your own finances? Let’s have a conversation!