Wealth is a Woman’s Issue

Addressing 9 Unique Challenges to Building Families and Communities for the Long-Haul

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When we discuss wealth and financial planning, it's crucial to recognize that women face unique challenges that can have a significant impact on their financial stability and growth and confidence in handling and growing wealth.

Understanding these issues can help her navigate the path to financial security more effectively. Let’s explore why wealth is considered a "woman’s issue" and how we can address and overcome these challenges with empathy, boldly and empowered.

1.  A History of Lack of Access & Autonomy

Women were discriminated against when it came to owning and managing their property, money, and even their bodies in America, especially married women. In 1839, the Married Women’s Property Act in Mississippi gave way to property ownership (and lack of liability for their husband’s debts). 

The First Women’s Bank of Tennessee was opened in 1919, exclusively for females and staffed by women.  But it was the 1960s before women gained the right to open a bank account without their spouse’s signature.

Shortly after the Equal Credit Opportunity Act passed in 1974 forbidding discrimination based on gender, race, religion, and nationality. 

2.  Financial Literacy & Confidence

Historically, women have had less access to financial education and investment opportunities. This lack of access often results in lower financial literacy and confidence when managing money.

While efforts to improve financial education for women are growing, significant gaps remain. Women can internalize the lack of understanding emotionally and feeling behind creates stress and not wanting to appear un-educated. 

As a result, some women do not know where to inquire or feel shame for decisions made without guidance. Addressing these gaps is crucial for empowering women in wealth management.

Fortunately, with financially literacy, women more times than not, experience higher performance (1% traditionally higher than men) and less volatility in their accounts due to their long-term views and holistic planning.

3. The Gender Pay Gap

One of the most significant hurdles women encounter in building wealth is the gender pay gap. Despite progress in many fields, women continue to earn less than men for similar work.

According to a 2023 report by the Pew Research Center, the gender pay gap remains persistent, with women earning approximately 82 cents for every dollar earned by men (Pew Research Center, 2023).

Although there has been some ground made (at least a 7% increase in the last 5 years) this disparity affects not only immediate income, but also long-term financial stability, including savings and investments.

Over a lifetime, these differences can result in substantial gaps in wealth accumulation.

4. Breaks in Career

Many women take breaks from their careers to manage caregiving responsibilities, such as caring for children or elderly relatives.

A 2021 report from the U.S. Department of Labor highlights how caregiving responsibilities, including family and medical leave, can significantly impact women’s career trajectories and earnings (U.S. Department of Labor, 2021).

While these breaks are often necessary and fulfilling, they can disrupt career progression and income growth.

Such interruptions can also lead to gaps in retirement savings, thus affecting long-term earning potential and financial security. Education on how to continue to grow their finances in this time frame is essential.

5. Longer Life Expectancy

Women generally live longer than men which introduces unique financial planning needing to stretch the same dollar further.

The Population Reference Bureau highlights that women outlive men in nearly every country around the globe by an average of 8 years.  (Population Reference Bureau, 2023).

This longer life expectancy means that women need to save more to ensure their resources last throughout retirement. Effective planning for a longer retirement requires careful management of savings and investments to maintain financial stability during extended retirement years.

6. Retirement Savings

Due to the gender pay gap and career interruptions, women often accumulate lower retirement savings compared to men. (U.S. Census Bureau’s 2018 Survey of Income and Program Participation, women are more likely than men to have no retirement savings.)

This disparity can lead to increased financial stress and insecurity in retirement. Developing targeted savings strategies and retirement planning that address women’s unique financial realities is essential for ensuring long-term security.

7. Single Women: Parenthood & Divorce

Single women usually have a single form of income.  With divorce, now-single women may have to absorb mortgages and debts from their marriages, stepping backwards financially.

If divorce has made it hard, if it also creates a Single mother they face particularly challenging financial circumstances.

In 2023, approximately 10.2 million children were living with a single mother in the United States, compared to about 2.1 million living with a single father (Statista, 2023).

Balancing work and parenting while managing all financial responsibilities on a single income can be overwhelming.

These pressures can affect wealth accumulation and long-term financial stability, underscoring the need for additional support and resources for divorcing women and single parents.

8. Financial Abuse and Control

Some women experience financial abuse or control within their relationships, which can severely limit their ability to manage their finances independently.

Research by the National Network to End Domestic Violence indicates that financial abuse is a common form of control used by abusers, making it difficult for survivors to escape abusive situations and achieve financial independence (National Network to End Domestic Violence, n.d.).

Addressing these issues is crucial for ensuring that women have the autonomy and support needed to manage their financial resources, a key aspect of their economic empowerment.

9. Wealth Transfer

Women are more likely to inherit wealth rather than build it through their own careers. While inheritance can provide a financial boost, it also presents challenges, including the need to manage and grow inherited assets wisely.

Providing women with the knowledge and tools to effectively handle inherited wealth is vital for their long-term financial well-being.

Moving Forward

Addressing these challenges requires a thoughtful and inclusive approach.

Advocating for pay equity, supporting career development, enhancing financial literacy, and creating policies that promote women’s financial health and security are essential steps. Recognizing and addressing these issues can lead us toward a more equitable financial landscape.

In conclusion, acknowledging that wealth is a woman’s issue is a crucial step towards fostering a supportive and empowering financial environment for women to create both a confidence and advancement.

By understanding and addressing these unique challenges, we can help women achieve greater financial independence and security, benefiting individuals, families, and society as a whole.

Pew Research Center. (2023). The Enduring Grip of the Gender Pay Gap. Retrieved from [Pew Research Center](https://www.pewresearch.org/social-trends/2023/03/01/the-enduring-grip-of-the-gender-pay-gap/)

Population Reference Bureau. (2023). Around the Globe, Women Outlive Men. Retrieved from [Population Reference Bureau](https://www.prb.org/resources/around-the-globe-women-outlive-men/)

Statista. (2023). Number of Children Living with a Single Mother or Single Father. Retrieved from [Statista](https://www.statista.com/statistics/252847/number-of-children-living-with-a-single-mother-or-single-father/#:~:text=In%202023%2C%20there%20were%20about,living%20with%20a%20single%20father.)

U.S. Department of Labor. (2021). The Impact of Family and Medical Leave on Women’s Careers. Retrieved from [U.S. Department of Labor](https://www.dol.gov/sites/dolgov/files/OASP/evaluation/pdf/WHD_FMLAGenderShortPaper_January2021.pdf)

National Network to End Domestic Violence. (n.d.). About Financial Abuse. Retrieved from [National Network to End Domestic Violence](https://nnedv.org/content/about-financial-abuse/#:~:text=Research%20indicates%20that%20financial%20abuse,returning%20to%20an%20abusive%20partner.)