How Women Can Bridge the Financial Gap

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Recent data indicates that females are seeing larger increases in pay than their male counterparts across the US. It is a small but encouraging move after a year of the opposite trend. While the gender pay gap across the western world is gradually closing, the issue compounds for women as they contemplate saving for retirement because of four factors: lower wages, fewer working years, lower investment returns, and longer life expectancy.

While some countries are doing a better job at encouraging men and women to participate in raising children, the time many women spend to raise a family (a hugely important and rewarding job) contributes to fewer years in the workforce. Additionally, their longer life expectancy on a worldwide basis is holding at roughly four and a half years longer than men. What, then, of lower investment returns? The most common explanation is that women take less risk and hold less exposure to equities, which have higher expected returns than fixed-income investments or savings.

Nobody understands women and finance better than women, and Barbara Stewart has been researching their financial lives over a number of years through her “Rich Thinking” series. Through these annual whitepapers, Stewart has examined everything from how women see money to how they invest, spend, and shape the future of the financial industry.

While everyone is encouraged to read the whitepapers, which contextualize quotes and stories to build a fabric of knowledge, key takeaways include:

  • Women are more interested in real stories from real people than textbooks.
  • Women are risk-aware, not risk-averse, are detail-oriented and reflective before investing.
  • Women are defining, creating and living their dreams rather than waiting for retirement.
  • Women have causes which they are passionate about which drive them.
  • Smart women ‘get started’ investing.


Stewart’s findings are certainly telling. One can understand why empowerment is paramount for women as they go about assessing their values, financial goals, retirement and aligning their investment portfolios accordingly.

Many women today have already started taking action, but for those that haven’t, there is no better time than now to get started. Whether you decide to work with an advisor or ask real people for real stories, here are a few things to consider and assess as you get started.

Side Hustle

At the risk of being Captain Obvious here, the best way to save more and invest more, is to make more. If you can manage it, side hustles are bomb. This isn’t to say that they’re easy; it’s a real commitment and a lot of work. But if you’re unsatisfied with your salary and not able to increase it this year, then having a side operation that supplements your income can be a great strategy and a lot of fun too. They also give you a real opportunity to pursue your passion. Opportunities include writing for digital publications or company blogs, holding ticketed meet-ups or events for an impassioned cause, starting a blog or YouTube channel, walking dogs, editing for grammar-challenged professionals (I know somebody who does this), offering creative design work, the list goes on.

Budget Time

Set a realistic budget that prioritizes debt repayment, (especially if it’s high-interest credit card debt), investment and savings. A budget isn’t meant to confine and restrict you, quite the opposite, it’s meant to organize and empower you for the future. A good budget shows you the power of your money, and a long-term budget can act as a vehicle for financial freedom. The catch is that you have to stick to it. Far easier said than done, we know. Start by figuring out your financial priorities: do you have debt? If yes, which debt has the highest interest rate? Pay this off first! Set up an automatic payment with your financial institution so that it isn’t something you can negotiate yourself out of paying. The longer you wait to pay off high-interest debt, the more debt you’ll accrue, and the more of your precious money you’ll waste. Next, what are you working for? What assets will make all this day job/side hustle worth it? Do you want to buy a house? Hold an impressive portfolio? Or travel the world? The answer to this determines what kind of investment portfolio you should be working to build.

Investing Shouldn’t Be an Afterthought

We need to rewire our brains. Investing needs to be perceived in the same way that saving is: you’re building up a lovely pile of money, but the money is strategically invested in order to generate more money. If you’re concerned about the stock market’s volatility and risking your hard-earned money, there are many conservative options available. Perhaps look to an exchange-traded-fund (ETF) that limits your exposure to some of the risk. Many ETFs track a broad range of stocks, thus giving you diversification and generally mimicking the overall trend of the market, which – while sometimes volatile – has only gone up in the long term.

They say anything worth doing is worth doing right, and when it comes to building a financial future, we’d say getting educated, understanding your financial options, and identifying a personal financial strategy is pretty high up there. Whether it’s seeing advice from real people, joining an investment club or working with a financial planner, there are so many resources available today to help women get started. The sooner they do, the faster they will rise and begin to see the rewards that will keep them financially secure for the rest of their lives.


Article Courtesy of Voleo

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