The Gender Wealth Gap is Devastating for Women, Here’s What You Need to Know
Many people have heard of the income gap between men and women, but the financial inequality between the genders goes even deeper, to something known as the wealth gap. While the income gap is stark, it pales in comparison to the wealth gap.
Understanding the wealth gap
image courtesy of Ellevest
The income gap focuses on the difference between how men and women are compensated for their work. It’s part of the wealth gap, which examines the differences between the genders when looking at a person’s assets minus their debts. Your income is one factor in your wealth, although it affects your wealth in many ways. Not only do women make less money on their income, this translates into smaller pensions and Social Security payouts, less in retirement accounts, and higher debts that take longer to pay off.
Gender Wealth Gap
The wealth gap is gigantic. According to Closing the Women’s Wealth Gap, in the US, women own only $0.32 for every $1.00 a man owns. When race is factored in along with gender, that difference grows even more bleak. Black and Latinx women own just $0.01 for every $1.00 a man owns.
In addition to your income, factors that determine your wealth include:
● Savings, including retirement savings
● Investments
● Real estate
● Other assets
● Student loan debt
● Credit card debt
● Other debt
Causes of the gender wealth gap
There are many reasons why the wealth gap exists. These include:
● The wage gap and other employment-related issues (such as lack of women in leadership—and therefore higher paying—roles)
● Sexist policies regarding banking matters (such as women being more likely to be denied a mortgage than men)
● Lack of access to financial education and training
● A disproportionate number of women that are trapped in a cycle of debt, even though women are more likely to pay their debts than men.
Unfortunately, the pandemic has had a greater impact on women’s wealth than men’s, with women leaving the workforce at higher rates than men and facing barriers to success in their jobs while working from home.
Here are some startling figures about the wealth gap from Inequality.org.
● While women make up 56% of college students, they hold almost two-thirds of outstanding student loan debt
● In 2017, women had $42,000 in median retirement savings while men had $123,000
● Around 21% of women have less than $10,000 in retirement savings, compared with 12% of men.
Don’t fall into the gender wealth gap
It’s vital that we take steps to address the wealth gap. Women need access to financial resources and given that the income gap still exists, we must find ways to help women accumulate their wealth with fewer resources.
Personally, working with a financial advisor who understands the unique circumstances women face can help you build your wealth. For your personal wealth, a financial advisor can help you determine how to make your money work better for you—such as determining whether paying down your debt or investing your money is the right move for you. They can also help you identify areas where you can cut back on your expenses and where it makes sense to spend a little more.
As a business owner, working with a CFO can ensure you understand your numbers and your options, they can ensure you are able to make informed decisions based on your goals, your priorities, and your challenges. They can also help business owners determine how much to charge for their services and strategize ways to increase their profits.
You refuse to settle for the status quo. Verte Consulting will work with you to ensure you have control over your company’s finances, so you’re able to grow your business and your individual wealth, and so you can grow your business to be as incredible as you want it to be.
