Financial challenges for women might not look the same for men. However, fiscally responsible females must understand the unique obstacles and develop strategies to overcome them. Here is what women should look for and avoid, plus ways to make the most of their situation.
Financial challenges come for us all. However, some people don’t fall victim to economic disasters because they create a solid foundation. Controlling your money is essential, yet many women can’t climb out of debt because of gender-specific financial challenges. What are they supposed to do?
Regardless of where you’re at in life, economic security matters. You could use surplus cash to pay for an education, plan a wedding, or prepare for retirement. Either way, understanding the unique financial challenges women face is the first step toward moving around them. Otherwise, you have to tiptoe around common pitfalls while chasing the lifestyle you desire.
Here are a few things to consider first:
- Nearly one-third of working women lack a retirement account, but it’s not always because they don’t make money. Many times, it’s because they never learned financial literacy skills.
- Meanwhile, women typically outlive their male counterparts by several years. Thus, they’re more likely to suffer disproportionately after a death or divorce.
- Women spend more time fulfilling familial duties outside the workplace, which can significantly impact their ability to perform on the job.
Put simply, women spend much of their lives caring for others and then neglect to build a financial foundation. However, they also survive for longer and require support in old age. Otherwise, they risk poverty instead of enjoying their golden years. Unfortunately, retirement planning problems aren’t the only financial challenges for women.
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What are the most common cashflow woes for women, and what can you do about them? Begin by understanding that females face unique challenges in the workplace. They’re also critical to their families and have exciting goals to achieve. Balancing everything can be overwhelming regardless of gender.
Here’s an example: Imagine going to the bank for a quick withdrawal, but the teller says your account is overdrawn. You’ve gotten paid from work already, but the money hasn’t landed yet. These days, you’re living paycheck to paycheck, so financial challenges can be disastrous. Once your payment hits the account, you must repay NSF charges before paying the bills. That cycle can only go on for so long.
Women who struggle to make ends meet can experience a snowball effect that prevents them from achieving their goals or planning for the future. They might incur a mountain of debt, neglect their health, or avoid specific activities because of money (or lack thereof). Financial challenges can come in many forms and last for a long time. However, these are the top 10 things that can throw us off track even when we’re doing our best:
- Loss of Employment
- Medical Emergencies
- Significant Dental Care
- Unexpected Expenses
- Home Repairs
- Vehicle Repairs
- Tax Liens
- Separation or Divorce
- Rapidly Expanding Family
- Unplanned Travel
Combine those financial challenges with gender-specific obstacles, and it’s a recipe for economic disaster.
Women can face peculiar issues when trying to develop a solid financial plan. Aside from everyday adversity, they’re also impacted by things that most men cannot fathom. The average modern female lives under different standards, often preventing her from climbing the corporate ladder.
What financial challenges affect women the most, and what can you do about them? Here is what you need to know.
The glass ceiling for women is legitimate. Even Forbes weighed in on the matter in a recent article. Their financial experts validated that working females might never break specific barriers. Further studies are underway to determine the exact cause of hindrances. However, the American Psychological Association thinks the problems are due to female performance in high-level executive positions.
As it turns out, women don’t respond positively to other women in power unless the powerful ones help support gender equality. Females have endured micro-aggressions from the opposite sex for long enough, and they thrive under equitable leadership. Unfortunately, there are only 37 Fortune 500 CEOs who are women as of 2020. That means many diligent females don’t get the representation they need at work.
TIP: Find a female mentor who can help you learn the ropes and advance your career.
Did you know that American women make 83 cents on the dollar compared to American men? Research also shows that the trend has existed for more than half a century. The persistent gender pay gap is now outlawed in the United States. Yet, many women still incur a pay cut because of their identity.
Salary discrepancies don’t just hinder women during their working years either. Lower lifetime earnings can mean fewer dollars in their retirement savings accounts. Plus, making less at work equals smaller pension and Social Security checks. As a result, a woman must work harder to build retirement funds and avoid late-term poverty.
TIP: Learn the 50/30/20 rule to develop better debt management skills and spending habits.
A woman’s work is never done. However, she doesn’t get paid for most of what she does. According to an article in the New York Times, modern ladies perform over $10 trillion in unpaid labor each year. That means American women would have earned $1.5 trillion had they been compensated with minimum wage for their troubles.
Moms, wives, and caretakers can spend countless hours cooking, cleaning, nursing, chauffering, planning, and organizing for their loved ones. They don’t get much recognition, nor do they receive monetary benefits for the work. Instead, they must create a work/life balance to achieve their goals and meet the needs of others without getting overwhelmed. Saving money and planning for retirement are often neglected as a result.
TIP: Teach your loved ones ways to help you complete minor tasks that fudge your schedule.
Gender plays another role in the financial challenges women face. Studies suggest that contemporary females with a public high school education lack the economic literacy skills to avoid money mishaps. That means women typically have more credit card debts, defaulted student loans, and other unpaid obligations. They’re also less confident when managing their cash flow, with a lower propensity for taking financial risks.
Many experts believe nervousness about money moves makes women less likely to achieve financial independence. Females often avoid volatile financial situations for fear of losing their investments, wasting their time, or causing loved ones to suffer. However, healthy risk-taking and money management skills are crucial for everybody.
TIP: Take some introductory economics courses to brush up on your financial knowledge.
Ambition isn’t a dirty word for women, and even Forbes agrees. Meanwhile, many females still try not to seem too determined in their careers. That’s because people often view ambitious women as bossy, pushy, unfeminine, or selfish. The reality couldn’t be further from the truth, however.
Success doesn’t come to those who wait for it, nor is it the product of luck or impeccable timing. You must be willing to work for what you want despite the nay-sayers. Female ambition may not be socially acceptable in some circles, but refusing to kowtow to the double standard demonstrates that women want and deserve an equal slice of the pie. If someone gets offended by that, it’s likely a personal problem.
Financial challenges are already overwhelming and life-changing without additional obstacles because of gender. Unfortunately, that truth does not bring all women out of the shadows. It drives some females to depend heavily on outside sources for security. However, there are ways to overcome financial challenges and enjoy economic effortlessness.
Gaining economic autonomy provides a significant boost to self-esteem, and it makes your lifestyle a little less stressful. However, overcoming the unique financial challenges for women requires validation, effort, and diligence. That’s because ignoring the issues won’t make them disappear. Plus, women deserve a fighting chance at financial security.
Are you a woman who struggles to make ends meet? Do you earn a decent paycheck but feel like your money management skills are inadequate? How often do you worry about retirement? If you’re unsure what to do about your financial challenges, follow these five simple steps:
Budgets get a bad rap because they require discipline, but restraint is necessary to prevent a disaster. The reason is that budgeting helps you track your spending and continually compare it to your income. That way, you can cut back when you need it or splurge when it’s affordable.
NOTE: Budgets can also help you calculate monthly savings for a substantial retirement fund.
Nobody can predict the future. Even those with a seemingly fool-proof plan can experience cash flow woes. When life throws curveballs, will you be ready? If you haven’t saved money for a rainy day, chances are you’ll slip into financial trouble.
NOTE: Nearly half of all American women have less than $100 in their savings accounts.
A side hustle can be exciting and empowering for women. Plus, it can generate enough cash to help you build a healthy surplus. Side gigs also expose you to new people and advancement opportunities that catapult your career and boost your confidence in corporate America.
NOTE: Consider your unique skill set and determine where your services would make the most money.
Financial advisors aren’t free, and most services aren’t cheap. However, they can tell you when, where, and how to invest capital for optimal gains. Their advice also readies you for retirement and provides the tools to request or require more from your job. Seek intuitive insights and mitigate financial challenges like a pro.
NOTE: The average financial advisor charges based on how much money they manage on your behalf.
Don’t be afraid to reach out when you feel stuck. Stubborn independence may look good on paper, but it will do you no favors. Without help at the correct times, you risk making terrible financial decisions that could negatively impact your future. Meanwhile, requesting assistance from suitable sources is a sign of wisdom.
NOTE: You can find free financial advice online if you can’t afford an advisor.
Financial challenges aren’t rare, and they don’t discriminate. Yet, women face more of an uphill battle than most men. Thus, women must overcome economic adversity with intelligent choices that lead to financial independence. They have to establish better habits to equalize the discrepancies.
According to economists, financial independence comes with these specific behaviors:
- Set a standard and keep it. Don’t let your need for instant gratification ruin your plans.
- Get an accountability partner. Find someone who can help you stay on track.
- Pay off debts as fast as possible. Start with small obligations to put more money in your pocket.
- Wait to inflate your lifestyle. Live humbly and reward yourself for accomplishing goals.
- Making savings a priority. Work cash for savings into your budget like it’s a recurring bill.
- Spend on what matters most. Refrain from making impulse purchases for a while.
- Learn to negotiate. Haggle when you can to enjoy lower prices or better rates.
- Keep an eye on your credit. Check your FICO score at least twice per year.
- Look to the future. Continue your education on finances to gain a better understanding.
- Take care of yourself. Avoid expensive medical problems with a healthy lifestyle.
Women’s financial challenges are distinct, but that doesn’t mean they’re deliberate. Many companies implement equity strategies to prevent gender pay discrepancies and other issues. However, much of the work belongs to the females who desire economic security and independence.
Working women must learn about the obstacles and devise a plan to overcome them. Then, they have to remain diligent lest they experience a cash flow snowball. Asking for help and seeking mentorship from successful females or financial advisors is an intelligent place to start.
About the Author
Sibongile Ngako believes that multifaceted women can accomplish tremendous things with compassionate support. As the VP of Consumer Compliance and Head of Global Compliance at Affirm, Inc., she leverages her expertise and authenticity to empower women in all aspects of life. Sibongile focuses on promoting inclusivity in the workplace as an ally and advocate of female perspectives. Her dedication to professional equity earned her the GRCB Spectrum Award in 2017.
Harvard-educated and family-oriented, Sibongile maintains a grounded and balanced approach to social justice reform. Her team strives to make a positive impression despite popular opinion. Her motto: “If you focus on making a meaningful impact, your reputation will follow.” Ngako fortifies her zeal for women’s empowerment through mentorship and company-sponsored URG and DEI programs.