It’s Women’s History Month, so let’s talk about something important: financial sexism. It’s not always obvious, but it is an issue that can impact women’s financial well-being in countless ways. From the persistent pay gap (which doesn’t always show up the way you expect!) to the “pink tax” on everyday products, women can face systemic disadvantages when it comes to earning, saving, and investing.
And financial sexism isn’t just about unequal pay, though that’s certainly a major component. It includes biases and mindsets that can affect your financial life at every stage. By talking about these issues and bringing them to light, you can arm yourself with strategies to navigate these challenges. Knowledge is power and when it comes to your money, you deserve to have all the tools at your disposal.
The History Of Women And Money
Let’s start with a little history lesson. For centuries, women’s financial lives (in fact, most of their lives!) were largely or entirely dictated by men. Women were…property, unable to own assets, enter contracts, or control their own earnings. And yes, women were earning. Contrary to what you might believe, women have worked outside of the home (yes, taking care of the house is work, even if it’s unpaid, but just go with me on this!) for centuries. They worked as maids, nannies, washing-women, merchants, ladies-in-waiting, servants, cooks, and more. Women were the first brewers of beer, women were teachers, women were seamstresses. As the world became more technologically advanced, women worked in factories, worked as telephone operators, worked as secretaries. Yet their money would be controlled by their fathers, their husbands, their sons.
It wasn’t until the 20th century in the United States that this really started to change. In fact, while women gained the right to vote in 1919, they didn’t have the right to their own bank account until 1974! That’s in my lifetime. In fact, my mother couldn’t have her own bank account until my younger brother was born. She had four kids, but wasn’t allowed to be financially independent.
So, while things have certainly improved, it’s no surprise that we’re still fighting for more. There are persistent inequalities that we have to combat – some systemic, some societal.
The Pay Gap: The Persistent Inequality
The pay gap is perhaps the most well-known manifestation of financial sexism. It represents the difference in earnings between men and women doing the same work, and it happens across industries and experience levels. While it has certainly narrowed, and is definitely less obvious, it persists, and over your career, can amount to hundreds of thousands of dollars.
Think about it: if you earn less, you have less money. Less to save, less to invest. You’ll have to buy less expensive items, which are more likely to wear out and need replacing sooner than a more expensive and better-made item. You’re less likely to be able to afford to be sick or to go to the doctor, so you’ll end up sicker later on, and be forced to miss more work. And this gap gets even bigger for women of color!
And you’re probably rolling your eyes. It’s illegal for a company to pay women less, right? But it’s not always as simple as the numbers on a paycheck. It’s also been documented happening industry-wide. For instance, computer programming was an industry primarily dominated by women – the internet was invented by a woman! (Radia Perlman, not Al Gore, no matter what he says!). But when more men moved into the field and took over, suddenly wages increased significantly.
Conversely, nursing and teaching, since they require advanced degrees, and women weren’t permitted to go to college, used to be dominated by men. However, when women flooded into the fields, pay stopped increasing at the same rate to balance inflation, and now both are notoriously underpaid industries.
The Pink Tax: Paying More for Being a Woman
Have you noticed that women’s deodorant costs a bit more than men’s deodorant, or the pink Venus razors cost more than a Schtick, with the packaging claiming they’re better for women’s “delicate” skin? Yeah, it’s basically the same product, and it’s the pink tax in action. It’s a documented form of price discrimination where products and services marketed towards women are often priced higher than comparable products marketed towards men. And while it looks like just a few extra cents on a bottle of shampoo right now, over a lifetime it adds up – and quickly.
And when you look for it, you can find it everywhere. Hair salons, dry cleaning, clothing. Sometimes, there is a reason a service is more expensive – for instance, a woman’s haircut can be more complex, but then you find that a woman’s pixie cut – same cut as a standard male cut – will still have an upcharge. Most of the time, however, the only difference is the color of the packaging or a slightly different scent.
Understanding and recognizing the pink tax is crucial to challenging it. If you know what to look for, you can make informed purchasing decisions. Consider buying gender-neutral products, or comparing prices across different brands and product lines. Push back against the upcharges – for your own wallet and to create a more equitable marketplace.
Investment Bias: The “Risk-Averse” Myth
How do you feel about investing? If you’re like most people, you probably prefer to use a financial advisor. I get it, investing can be complex, and it feels better to have an expert managing large amounts of money.
However, it’s another area where you need to be surprisingly wary. There’s a lingering misconception in…well, the world, that women are inherently more risk-averse than men. As a result, sometimes financial advisors will steer women towards more conservative investments that have lower growth, on average. Women are even discouraged from taking on riskier investments! And it’s not your fault – you’re listening to an expert, so it’s logical to take their advice. It’s not even really the advisor’s fault – often, these stereotypes are so ingrained, we don’t realize we have them. But at the same time, you’re losing out on substantial returns and hindering your financial progress.
So read up on investing so you can make educated decisions. Carefully vet your financial advisors to make sure their priority is your financial well-being, that they’re not going to let gender stereotypes get in the way. Maybe even choose a financial advisor or coach who is a woman!
The Impact on Financial Literacy
Financial sexism doesn’t just affect women’s earnings, spending, and investments; it also plays a role in their financial literacy. For a variety of reasons, women are often less likely to receive a comprehensive financial education than men, due to societal expectations about gender roles, differing needs, and an outdated perception that finance is a “male” domain (I experienced this when I was in the corporate world!). The result is that many women may feel less confident and knowledgeable about managing their money, which means they’re less comfortable teaching it to their kids, which perpetuates the cycle.
The lack of financial literacy can manifest in several ways. Women may be less likely to invest, less likely to negotiate, and less likely to feel comfortable making major financial decisions. Women who aren’t equipped with the knowledge and tools to understand complex financial concepts are less able to advocate for themselves and make informed choices.
The connection between financial sexism and financial literacy is complex. When women are consistently told (directly or indirectly) that they are not good with money, they may be less likely to seek out financial education or believe that they can become financially savvy. This can create a self-fulfilling prophecy: the lack of confidence leading to a lack of knowledge, leading to a lack of confidence…well, you get it. However, creating resources (like this blog!) that address the specific financial challenges women face, and fostering a supportive environment where women feel empowered to learn about money can help us start to break down these barriers.
Taking Control: Strategies for Empowerment
So, you have some facts, albeit slightly depressing ones, but what can you do about it? You’re not powerless. You just need to acknowledge and challenge the biases and take control of your financial future.
- Negotiate your worth
Don’t be afraid to negotiate your salary and raises. Research the industry averages, consider your experience, and demand to be paid fairly. - Become financially literate
Knowledge is power. Take the time to learn about personal finance, through books, workshops, personal coaching, and blogs from educated and trustworthy experts. The more you know, the more confident you’ll feel – and then you’ll teach your daughters! - Invest confidently
Educate yourself about different investment strategies, find an advisor who understands your goals and risk tolerance, and don’t be afraid to ask questions or challenge assumptions. - Join communities focused on financially empowering women
Connecting with other women who are on the same journey can be heartening and useful. You’ll find support, a place to share your experiences, and others to learn from.