For years, studies by financial services firms have shown that women lag behind men in various aspects of personal finance. We’re not just talking about the gender pay gap, there are also other gender inequalities in pensions, investments and protection.
Shedding light on gender inequalities and how they arise fosters awareness that can lead to solutions and change. But there is another side to this.
If women constantly hear that they don’t earn enough, don’t save enough, don’t invest enough, and aren’t confident about their finances, could this lead to a self-fulfilling prophecy? With something stacked against them?
Benefits of transparency
We need to know about the problems or drawbacks before we can address them and start doing things right. If inequalities remain hidden and no one discusses them, nothing is likely to change. Reports highlighting issues such as women’s deficiencies in retirement savings and their insecurity in investment issues raise awareness that can lead women to make more informed decisions on issues affecting their financial future.
This is certainly the aim of AJ Bell’s Money Matters campaign, which focuses on helping more women invest and closing the gender investment gap.
Money Matters recently published a report: ‘Financial Problems: Uncovering women’s financial difficulties and providing a toolkit to overcome them‘. This looks at the financial impact and potential solutions for things like being a single woman, having children and going through a difficult menopause.
Shedding light on gender gaps is something that people in fields as diverse as financial services and psychology see as important. “By highlighting these gaps we are not only pointing out the problem, we are encouraging action and change.” says Bayu Prihandito, founder of Life Architecture, a certified psychology counselor and life coach.
This is executive coach Dr. It is echoed by Catherine A. Baudino. “I believe it is important to highlight the gender gap in personal finance, as this gap is mainly created by women,” she says. “While men negotiate their salaries from the first meeting, their female colleagues accept the proposed wages without a single comment.”
As an executive coach, Baudino teaches her female clients to ask. “They are often afraid of appearing arrogant, but when they value themselves, they gain the confidence to negotiate and question the offer on the table.”
Some commentators believe that transparency in all walks of life should be a positive and therefore support the financial services industry’s efforts to document gender inequalities.
“What is the benefit of not sharing data? wonders Kelly Biggar, head of wealth management at recruiting firm Fram Search. “Our hope is that highlighting gender differences in pay, pensions and protection will enable women to negotiate better, which will enable them to contribute more to their pensions and have protection that represents their financial value.”
Emphasizing the benefits of financial independence and security can also motivate women to actively engage with their finances. “The more open we are as women about how we manage our finances, plan for retirement and prepare our legacy, the easier it will be for others to follow suit,” says Bianca Miller-Cole, a former TV finalist. apprentice author of new book Rich Forever: What They Don’t Teach You About Money, Finance, and Investments in School. “Gone are the days when women had to rely solely on their partners to manage their finances – unless they wanted to.”
However, some commentators point out that we cannot escape some facts, such as the fact that women do not hold as many senior positions as men. “Maybe women don’t have the opportunity to earn more,” says Megan Jenkins, partner at financial planning firm Saltus.
Arguably, things like this can lead to a self-fulfilling prophecy. If women are unable to see other women in senior jobs, this can impact their mindset and self-confidence, which will impact their career progression and ultimately how much money they can save or invest.
Psychologists say constantly hearing negativity can reinforce self-limiting beliefs. “If women are constantly exposed to the idea that they are at a disadvantage, this can lead to a mindset where they believe they are destined to remain in that position,” Prihandito says. programming, where if you are told something over and over again, you can believe it and stop trying to change it.
Jenkins points out that women may experience negative feelings about their financial situation when they see men earning more and receiving higher pensions. “But it’s important for women to realize they can improve themselves,” she says. “Women are making a conscious effort to level up; I definitely see this among my clients. “Some have taken a long break from their careers and are trying to increase their savings.”
Louis Williams, head of behavioral insights at Dynamic Planner, recalls a study a few years ago that looked at people’s salary expectations. “There were significant differences; She says men expect more from women. “Women can expect to get lower and higher salaries because it has been indoctrinated into them.”
But that doesn’t mean we shouldn’t talk about it. “For it to be this transparent, we have to do the opposite,” he says. “The more women talk about this issue, the more likely they are to become aware and take action.”
Williams says women’s sport is a prime example of how talking about inequalities, such as the gender pay gap, can pave the way for change. “We’ve seen this in tennis, where grand slam prizes are now equal between men and women,” she says. “That changed as a result of doing research and talking about it.”
In the ’80s, ska band Fun Boy Three teamed up with all-female pop band Bananarama to record ‘‘It’s not what you do (It’s the way you do it)’ – a renewal of an old jazz song. The lyrics outline how industry commentators believe gender inequalities in personal finance should be approached.
While it is important to uncover what the barriers to women’s financial resilience are, it is also important not to define women by these issues and show women that this is not inevitable; If they take action to change things, they can improve their financial situation.
“I think it’s a delicate balance; it’s all about presentation,” says Prihandito. “Instead of just focusing on the gaps, we can highlight the solutions, success stories and strategies women have used to overcome these challenges in the past. “The narrative should be about empowerment and growth, not just inequality.”
Miller-Cole agrees. “While it is crucial to acknowledge these gaps, this should be done in a way that empowers women to take control of their finances rather than reinforcing negative thinking,” she says. “Education and support can help women close these gaps. “I think there is a generation of successful, independent women who are succeeding in their careers and businesses, while also building a lifelong financial legacy in the process.”
As successful career professionals and business owners, these women serve as role models and share more about their personal career choices, finances, and success tips. “The topic of finance has become more mainstream, and not just among financial advisors or those in the finance industry, which makes it a more attractive prospect,” says Miller-Cole.
She believes financial education should be inclusive and address finance as a whole, with some notes on gender-specific challenges. “While the basic principles remain the same, it can be helpful to tailor content to address the unique financial concerns and opportunities for both women and men,” she says. “The goal is to empower both genders without reinforcing distinctions.”