By: May Lopez, W*SS Graduate Intern
The gender wealth gap lives on. Women in the U.S. make less than their male counterparts. Although there are factors experts use to explain the gender pay gap (career choice, opting out of the workforce for longer periods of time, union membership, etc.) there remains a sizable percentage of the gap that remains persistently “unexplained.” Perhaps, it is the unforgiving maternity leave policies or the devaluation of traditionally pink collared jobs, but either way women are paid less.
Most people picture men when asked to think of investors, financial gurus, and hedge fund managers, and yet, women not only earn higher returns than men but also add more to their account balances over time, according to a study by Fidelity.Despite their proficiency as investors, women invest less than men.
Why? Historically, the investment world has been dominated by White men in large cities and financial education has been plagued by inaccessible language. There’s a shift happening though, and more and more women are investing. This is important because women live longer than men, and will need that compound interest.
So where to start? First, remember it doesn’t all need to be done today. Second, take time to understand your current finances. If you have student loans, make sure you understand the terms and conditions, if you don’t ask someone or seek out resources online. Make sure you have a good understanding of your income and expenses and then take it further and keep a budget. Third, set goals. If you have something to aim for you will stay motivated even during complicated times.
Of course, it’s important not to dismiss the systemic inequalities which make it harder for women and especially women of color to build wealth. However, the more we as women understand how and where we are excluded from the better we will be at dismantling those systems. It’s time for us to get involved, to learn and take control of our finances. We are the CFOs of our lives.
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