Navigating Women's Unique Financial Challenges

Her Money Matters series

Financial Wellness
March 9, 2024
Navigating Women's Unique Financial Challenges

March is not just a month for celebrating the achievements of women; it's also an opportunity to acknowledge and address the distinct financial challenges many women encounter. From the gender pay gap to longer life expectancy, women navigate a financial landscape with its own set of hurdles. 

This International Women's Month, we’re excited to kick off the ‘Her Money Matters’ series.  A series of articles that will shed light on key challenges faced by women and our insights into how these can be overcome on the path to financial empowerment. To get us started we thought we’d surface 7 interesting stats that speak to these challenges. 

1. The Gender Pay Gap

A recent study showed that in the US women earned on average 82% of what men earned. This persistent gender pay gap remains a challenge not just for those in the US but for women worldwide. 

2. Career Breaks and Interruptions

Career interruptions due to family responsibilities, such as maternity leaves and caregiving roles, can have profound financial implications. The Department of Labor  has now estimated that taking on these roles can cost women nearly $300,000 in lost pay over their lifetime.

3. Longevity and Retirement Planning

Research has found that women have 65% less saved in their 401ks than men yet are expected to live longer. Women therefore need to conserve their retirement savings for a longer period whilst also starting off with less money, this means women ultimately have less margin for error.  Only 39% of women are confident they will have sufficient funds to last 25 years of retirement. The need for strategic financial planning to ensure financial security in later years becomes even more important. 

4. Investment Confidence & Financial Literacy

A prevalent challenge is the investment confidence gap that often hinders women from actively participating in wealth-building through investments. By 2030, women are projected to hold two-thirds of the nation's wealth. Despite this anticipated shift, historical patterns of labor division have resulted in fewer financial education discussions for women over their lifetimes compared to their male counterparts. Consequently, many women often express lower confidence in making financial decisions and report feeling less prepared for retirement.

5. Access to Capital and Support

For women entrepreneurs, access to capital is often a hurdle. The average loan size for women-owned companies amounted to $49,712 vs men-owned companies received on average $83,198. In addition only 2% of female founders receive venture capital. Creating a supportive ecosystem that offers mentorship, networking opportunities, and educational resources is crucial in fostering the growth of women-led businesses.

6. Discrimination in homeownership 

It was not until the Fair Housing Act was passed in 1974 that women were legally protected to obtain a mortgage without a cosigner. However the path to owning a home can still be challenging for women, particularly women of color. Women often encounter bias from lenders, harassment from landlords, and diminished returns on housing investments throughout the home buying process. When acquiring a home, single women pay 2% more than their male counterparts, and when selling, can receive 2% less in return. A 2022 study found that women have access to 18 percent less of the real estate market than men because of the wage gap. However despite these challenges single women are outpacing single men when it comes to purchasing homes. 

7. Healthcare costs and taxes 

What is often referred to as the  ‘pink tax’ has been calculated to cost women roughly $2,135 per year! This tax is an extra charge that is placed on products and services that are marketed to females. This includes items such as menstrual and hygiene products, even toys marketed to girl children are at times priced higher.  

International Women's Month serves as a timely reminder to advocate for gender equality, both in financial opportunities and in addressing the challenges that women uniquely face. However it is not all doom and gloom, year over year women are making considerable strides to close these gaps. Some of which we will cover in our next article. 

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