Recently a journalist asked me: What are the unique money challenges women face? I had some trouble choosing just one to highlight. Because none of the challenges stand in isolation. They are all interconnected. I had a substantial list and I had not even started to include the intersectionality of persons of color or sexual orientation into the equation.

I’ve been thinking about writing this article for a couple of months now. I put it off as it always seemed to be too big to unpack. However, inspired by my recent readings of how perfection is the enemy of progress, I went ahead. I’ve gathered my observations as a female investor, as a female professional in the male-dominated finance industry and as a female citizen of our western society.

My observations are general and based primarily on women who may be in heterosexual relationships. I know there are women who are in different situations, some may apply to them, some may not. Some of these observations might apply to men as well. My aim is to spur discussion, not to single any group out or to nitpick about where we might fit in the Venn diagram of inequality.

These are the unique financial challenges women, in general, face and why it’s come about or why it is meaningful. Let’s start with the obvious:

Where we are today

Women live longer but they earn less.

What this means is that women have to save more on an absolute basis, (total dollars at retirement age) than men to have the same quality of life after retirement because the pot has to last for a longer period of time. In Canada, the average life expectancy for men is approximately 81 years. For women, it is almost 85 years. So retirement funds have to last 4 more years on average.

Women also have to save more on a relative basis (as a percentage of their income) because their wages are lower. According to a 2015 UN Human Rights report, Canada ranks 8th highest in the gender wage gap. Women in Canada, on average is making 75 cents to every dollar her male cohort makes. That averages out to be $7,200 less every year.

We all know hard it is to save 10%, 15%, 20% of our take-home pay. On a lower base, it’s even harder because it’s not like rent or food is cheaper just because of gender.

The Pink Tax

money challenges women face
 #PinkTax photo credit Tom McDermott @TomKatMPLS

Actually, these consumable goods are likely to cost women more because of gender. I recently saw a thread on Twitter on how a pink hotel basics kit cost more than the blue hotel basics kit, even when they display the exact same contents. There are more examples than we can count: vitamins, razors, shaving cream, drugstore lotion, dry cleaning. These products (amongst others) cost more once branded pink. Even if we say it’s only 5% more, imagine compounding that 5% with 20 items and having to use them for 4 more years! (I don’t want to hear about how I won’t be shaving my legs at 82 – I might and that’s not the point)

Now you see how the cost of living is adding up. Combining in the wage gap, it’s now clear how women end up retiring in a very different financial circumstance than men.

Women are more likely to have career breaks.

This is the classic motherhood disadvantage. This results in their career trajectory being shallower than male cohorts. This is the same for elder care; women are more likely to take time off here as well. Add this as another factor limiting their earnings trajectory. But this disadvantage is not only impacting earning potential. I ask myself, what are these women living off when taking these breaks? They are living off savings. If she is living off savings, how likely is she to contribute or be able to contribute to retirement funds? Is she actually living off some of that retirement pot while taking these pauses?

Some may argue that perhaps the woman has few costs during this time because her husband may still be working. But what about professional single women who are choosing to raise children as a solo parent?

So as it turns out, women may have fewer years to save for retirement.

What do we have so far? Women have fewer years to save, they have to save more all the while earning less and their costs are higher just to live the same life as male cohorts.

Now we turn to investments and look at some unique challenges here:

Investment/finance discussions do not include women

Financial Services routinely under-serve women. When/if women marry; financial advisors routinely address the husband. In a 2015 white paper published by, researchers found that “73% of women report being “unhappy” with the financial services industry”, and “the male partner is still 58% more likely than the woman to be the primary contact”

It’s not to say the “man of the house” isn’t making the best decisions as far as he knows. But perhaps both the husband and advisor don’t realize that the wife’s objectives may differ and there is another optimal strategy.

Women are under-investing

As a result of financial information directed at men, women have a lower participation in the capital markets. In general, fewer women invest in stocks than their male counterparts. Why is this an issue? These under-invested women are not participating in the re-distribution of wealth. In our capitalist society, we are facing greater inequality in executive versus employee pay and in wealth amassing in the hands of the few. You know, the rich get richer, the shrinking middle class? Women face the double whammy of being the employee and not sharing in the benefit of higher corporate profits as other shareholders.

Women are more likely to assume control over finances during the most difficult time and under the most difficult circumstances.

This is usually during or after a divorce or after the death of their spouse, but it could be because of the death of their father. They have to make decisions when it is cognitively hardest for them to do so. Again, men are often tasked to be the decision makers, women are left out of the financial discussion, they may tire of battling for the Advisors attention.

It is perceived that men have “more expertise” in this arena. I have several professional female friends whose fathers run their investment portfolio. These are practicing lawyers and project managers. But they feel their father has the expertise from years of work and managing his own portfolio. That is not untrue, but it is not sustainable.

I remember back to when my father passed away, even decisions on seemingly straightforward items became incredibly difficult. I had trouble choosing pink or red roses for his wreath. Now imagine if that decision was something that had a financial bearing. It is easy to believe this is when financial mistakes are likely to be made.

Societal status require women to spend

I’m not talking only about designer shoes or handbags. Shopping is often picked upon as a women’s vice. What I’m talking about is much more insidious. Society expects women are to be “generous”. To achieve status, women are often pitched to serve on volunteer boards or to chair fundraising committees. They are encouraged to donate their time and money.

On the other hand, status for men involves getting involved with business ventures. They are often pitched opportunities to fund other projects and startups. Status for men is finding/recognizing the “next big thing”, getting in before a stock “blows up”.

Don’t misunderstand, these charities do need donations. Volunteering can be highly rewarding and fulfilling. I encourage everyone to participate in philanthropy. I’m not saying one is better than another. Volunteering and venture capitalism need not be weighed. But we know that the two are not without gender implications.

Where does this leave us?

What we see here is that gender, income and investing are interconnected. Women face systematic disadvantages at many levels, from earning, spending right through to investing and retention. Personal finance for women is not as simple as “spend less than you earn”.

It’s a lot to take in and I know I haven’t touched every aspect of this thorny topic. This article does not capture every nuance of the female experience to money.

Our society continues to fight for equal pay and representation. We continue to fight for career benefits that do not discriminate against time off. We are all part of a whole in this movement.

But individually, there are many steps we can take that will lead to impactful change on a societal level.

If you are a woman reading this, you can start an investment account today. If you already have one, consider contributing just 1% more. Consider how you might take a little bit more risk. If someone else is managing your portfolio, take the initiative and call them. Make an appointment to discuss your investment portfolio and how it might evolve. If you want to learn more about finances and investing, how about hosting a brunch with your girlfriends and share knowledge and hardships? There are many personal finance blogs worth following (hopefully this one).

Take a moment to articulate it a personal finance goal as it relates to earning, saving or investing.

My hope is that you saw yourself somewhere in these lines and it resonated with you. I am confident that by taking a step, no matter how small, we can start turning these systematic challenges.

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