Financial Independence for Women – Why It’s Harder For Women Than Men

PART 1: The Facts

HisFI had it all set up. The multiple retirement accounts, the 401k, the index funds, the savings and he was even going to max them out every year while STILL living on the amount of my entire paycheck. Practicing gratitude and the law of attraction I can be pretty darn happy about this most of the time. There is that some of the time though, where it starts to feel like I am completely and utterly behind. This combined with my money anxiety is what led me to writing this post. The fact is saving, retirement and financial independence for women is much more difficult than men. [Significantly more so if you are a woman of color].

Financial Independence For Women and Socialization

Our traditional structure in society puts women at a disadvantage in many ways; and the way in which young girls are socialized is at the root of this.

In a 1997 Dreyfus Gender Investment Comparison Survey they found that “parents encourage their sons to start earning money at a far younger age (13) than girls (16-18), and twice as many boys are encouraged by their parents to save their money.” Generally, women are given very few female investment models to look up to and are not always encouraged towards careers and success in a fiscal manner.

In a study of young girls and boys in countries around the world, girls showed more math anxiety than boys, even if they were top achievers, according to research from the University of Missouri, the University of California at Irvine and the University of Glasgow. (MarketWatch)

In addition to this, women are socialized early on to not go into STEM (Science, Technology, Engineering and Math) and accounting areas of education. All of which are geared towards young men and deemed “unfeminine” choices for women. According to the Census Bureau’s American Community Survey, women comprise 48 % of the U.S. workforce but just 24 % of all workers in STEM fields. Thankfully, many initiatives have been launched to de-stigmatize STEM for women and encourage young girls to pursue these fields. (U.S. Department of Commerce)

Meaning, we have a diversity problem in the industries where women can be the most fiscally successful AND achieve a solid grounding in financial information and general math. All of these skills and confidence in such skills provide a solid footing for pursuing financial independence for women.

Financial Independence For Women And Growing Up

So if most women are socialized at a young age to fear, have anxiety or simply a general prejudice against the STEM world including math. What happens when it is time for them to grow up and start being an adult.

Turns out, a majority of women WANT to know about finances and investing! It also happens to be that they are uncomfortable with these conversations. (Ameriprise Financial)

According to the 2015 Fidelity Investments Money FIT Women Study, 80% of women confess that they have refrained from and feel uncomfortable with discussing their finances with those they are close to. Their parents, spouses, siblings, best friends, etc. (Fox News and Consumer Recovery Network)

YIKES! Do we score in any statistics???

According to Fidelity’s same study 82% of women are proficient at managing their day to day budgets. (Thank God)

Financial Independence for Women: Is early retirement possible?

Here is one more problem for women. Women have often been left out of the finance world because they take time off to raise a family or get married and are not the main breadwinner. If they aren’t working, their retirement accounts will reflect this. Which is a serious problem ladies, considering statistics show we live on average 10 years longer than men, especially if in a long term partnership.

Let’s say that we happen to be in that group of women who has always worked right alongside their partner. This leaves one last hot topic to touch: the wage gap. Not ALL positions have a wage gap, however this exists in many companies. In 2015, women working full time in the United States were paid 80% of what men were paid. Meaning women are at a 20% disadvantage for saving and preparing for retirement. For more on this issue check out “The Simple Truth About the Gender Pay Gap” by AAUW.

According to a January 2012 study by Ameriprise Financial, more men than women have determined how much money they’ll need to retire, have set aside money in their investments for retirement and feel confident that they’ll reach their goals. In fact, a 2010 study found that 92% of women don’t feel educated enough to reach their retirement savings goals, but that 56% of them want to be. (LearnVest )

So the whole world is against us right?

Good thing we can still do something about it.

PART 2: Beating the Odds

Let’s Get it Together

While women may have societal structures chained to our ankles, this does not mean we can’t pull out the bolt cutters and get to work. The work will be harder and will not be fair, however, if we don’t do it, the second generation FI and young women we interact with will never have that female role model for finances.

This means a change in mindset on a personal level. Above, I stated how we socialize young girls to veer away from the “unfeminine” areas of study. Why would this be? Because women have been taught that their worth is external and sexual. If this is what brings you as a person value, your funds will go to support this. Perhaps this is the reason that only 48% of women pay off their credit cards balances. (The Simple Dollar) As a society we place a HUGE amount of weight on women’s looks and less on ability and even LESS on their thoughts or ideas. The patriarchy runs deep. Frugal Woods has an excellent article that covers this idea even more here.

Trust me, I understand the anxiety and struggle of a lower paycheck. I am an art teacher for heaven’s sake. I am not going to let this stop me from being outspoken and educated on finances….specifically my own retirement, investments, and savings. Changing my mindset to both a feminist and frugal one has been where the real work is since most of this is engrained.

Here is a short list of the things I had to work on (some I am still working on – let’s be real) in order to have control over my finances:

• Eliminate any credit card debt by eliminating expenses. This means not falling into consumerism, living minimally, and cutting out those trips to the salon.
• Start my own emergency fund. Future post: “How I put $1,000 in my saving in one month”
• Talk about my finances with my friends or family who are doing well. My Aunt gave me some fantastic advice for retirement and finances. She is another kick ass woman who still runs independent finances from her husband.
• Start a separate retirement account outside of what my work provides. If your work does not offer one, still have multiple retirement accounts.
• Find amounts to save and automate them. My motto now: Pay yourself first. If I waited for what was “leftover” at the end of the month, there was nothing left over. There never is.
• Be confident in what I do know and always learn!
• I’m okay with what I earn. If I sat around all day and said “I’m not paid enough.” or “I wish I could do that, but I just don’t make enough…” (which I used to say), that is exactly what would happen. Changed my mindset. Approached what I do have with gratitude and knowledge and then see where that can get me.

Financial Independence, NOT Dependence

Since this is “His and Her FI Post” it is only appropriate that I touch on the relationship factor. HisFI and I keep separate bank accounts and run separate retirement/investment accounts. We split our living expenses 50/50 via PayPal while always keeping a running list on our phone for who bought what and who owes whom.

We make individual and couple goals for our funds. It is dangerous ground for one individual in the couple to try and dictate where or how money should be used. See “How NOT to tell your Spouse about FI” by HisFI. Different values are what keeps us individuals. This means we aren’t telling each other what to do or determining that one person needs to fulfill certain roles.

Whether it is travel hacking on credit cards which we do together or our individual investments we communicate and are honest about all of it. I am really thankful that HisFI has helped me and is always willing to bat around ideas.

We both look at each others accounts and know the overall numbers. It wasn’t always rainbows and butterflies. I used to be really cautious about this. I did not want anyone to know my finances or share what I had spent money on for fear of judgement or fights. (Yes I was in the 80 some percent of women who find it uncomfortable to talk about finances…but here I am blogging about it now!) I was also not making intentional choices or even watching where my money went.

While HisFI was always more open about his finances with me he was in the same boat with finance choices for some time as well. Once the secrecy was dispelled, and we weathered a few storms, honesty and openness became our policy. In the end we both needed to feel secure affording us the ability to be vulnerable without fear of any push one way or the other. HisFI and I work as an equal partnership in our finances now making us stronger as a unit. For another couple who have done it and done it well check out “Our Next Life”.

Calling all Women!

Print by Jordan Grace Owens.

As my final close to this post, I am calling the financial independence for women community to start taking action and spreading the word for other women. It is evident even in the FI world, where the top blogs and podcasts are male dominated [Shout out to Gwen on Fiery Millennials who is ranking!], that women need a larger voice out there for how to do it. I am not talking as a guest speaker to share how well you may have saved money with domestic traditionally female household duties, but how and what are you doing with your paycheck, your budget, and your investments in order to be FI and FIRE.

Perhaps more importantly, to share the trials and tribulations as a woman so that second generation financial independence for women can continue to grow.

Final Thoughts on Financial Independence for Women

Our reality for American women is that it is harder to get out of a debt spiral, contribute to retirement and savings all while planning for the future. Financial independence for women is a very real struggle. I want to also say that I am nowhere near knowledgeable in every way for finances. I am working on myself and therefore my finances to be able to beat the odds; control my cash flow with a plan for the future.

Have any of you experienced these struggles I talked about as a woman? Or even questions about your finances or choices that would have never been asked of a man? I look forward to hearing from all you kick ass ladies out there!

P.S. Now considering changing name to Feminist and Frugal….what would HisFI be called? Oh yes, he is a feminist too! 🙂