It’s not news that women earn 79 cents to every dollar a man makes. It cannot be disputed that pay inequity still exists because of discrimination towards women in the workforce. Women are passed over for promotions and raises more often than their male counterparts are, even when they are equal in terms of education and experience.
Closing the wage gap will take years to see a shift in legislation and societal behaviors. Though this unfortunate imbalance needs to be rectified, there are ways to help women on a personal level now. There are a few things women can do now to help close the wage gap and add more financial security.
Below, I have listed some of the money mistakes women make that keep them earning less than men.
In 2016, women are making more and have more control over their finances. The decisions women make regarding their finances can make the difference between building wealth and living in debt. There’s no reason for women to sit idly by while someone else determines their financial security.
As a single mother, I was the sole decision maker on how finances were spent in the household. This gave me the power to control my lifestyle, but some mistakes I made affected my family and I negatively. I quit a high-paying job with no way to bring in additional income as well as rented my home to professional squatters.
These are extreme examples, but I’m not alone in making unwise financial decisions. I’ve noticed a trend amongst the women in my circle, who have also made mistakes that have put them in precarious financial situations.
I believe that a woman’s strength comes from having total control of their life, especially their earning power, and have listed some general money mistakes women make that keep them earning less than men.
Putting Their Careers On Hold for Motherhood
Most of the time, women are the ones who will take an absence from work to stay home with the kids. Yes, more men are doing their part, but the harsh reality is that women continue to be the primary caregivers. Due to the wage gap, husbands are frequently making more money than their wives, therefore the vote for the parent who will stay home often goes to the woman.
A leave of absence includes taking an extended maternity leave up to 18 months or leaving their careers until children are of school age. Often times the couple decides that when they compare child care costs, it makes more sense for one of them to stay home with the children. This may make sense if child care costs exceed a wife’s income however some families never take account the entire package such as health insurance and other benefits. Sometimes it’s more economical for both parents to work.
What’s worse, women who take time from work are missing out on a lot more than salary. They have long periods of time they must make up to be eligible for promotions and raises when they do return to work. In addition, they’re losing out on employer contributions to their 401K.
Women need to take a harder look if they can really afford to stay home to raise the children or if they’re better off financially working.
Taking Care of Family Members
As the nurturers of the family, women tend to take the responsibility of taking care of their family members. This may involve staying home to take care of the children or it may even mean taking care of an elderly parent. Even when a woman doesn’t decide to quit her job, she may lose out on advancing by taking off frequently to go to appointments.
Couple this with the financial burden of having to take care of additional family members, there’s less money to cover necessities.
I didn’t return to the classroom one year because my mom fell ill. Though I don’t regret staying home to be with her, I regret not having any money saved or additional money coming in. If I could do it over again, I would have started my blog while I was still working.
Though men do take care of their families, it’s not as expected as it is of women. Women who are more successful or have a little more money may be hounded by parents and siblings who do not. Women often loan money and cosign for family members who are not in a financial situation to pay them back. This causes a strain to a woman’s finances and takes away money that would be better served going towards her retirement.
To help alleviate some of the financial stress of taking care of elderly parents, women should first look into additional outside resources such as long-term care insurance as well as help from local and national government programs. Women need to also stop bailing family and friends out and consider their financial security first. Become educated and read this book and learn to say no.
Leaving the Responsibility of the Finances to the Husband
Back in the day when men were the primary bread winner, it was more socially acceptable for them to handle the household finances. Socially acceptable, but not okay. In this day and age, there is absolutely no excuse why a woman should not know the financial health of her home.
Even if a woman doesn’t work outside of the home or makes less than her husband, his actions have a tremendous effect on everyone. Women need to be more active in dealing with their household finances. I’ve seen too many women devasted simply because they didn’t know where the money was hidden during a divorce. One of my friend’s mother went from living in a 6 bedroom to barely making ends meet in a tiny one bedroom apartment. What’s worse, her ex-husband controlled the finances and now lives in a bigger house with his new wife.
This is no surprise considering that according to the Women Institute for Financial Education, a woman can see a decline in her income as much as 27 percent within the first year of divorce, whereas a man’s income can go up as much as 10 percent. It is imperative that women become more aware and active when it comes to their household finances.
If your husband is better suited to manage the household finances, by all means, let him continue to balance the budget. Just make sure you know the numbers like the back of your hand. There’s no excuse for you to be clueless when your finances are in order.
Not Asking for Raises or Promotions
When was the last time you asked for a raise? If you’re a woman, probably years ago. Or worse never. Women will often seek out raises when they think their performance has warranted a promotion from their boss. Men on the other hand, not so much.
Ever worked with John who was lackluster at best at his job and watched him year after year earn promotions and raises? If so, you’re not alone. See, John did something that most women don’t, he asked for a raise.
Women will often determine their promotion-worthiness by their past performance, whereas men will base their worth to a company by their future potential. Not fair, but that’s what usually happens.
If you’ve been working your butt off, go into your boss’ office and ask for a raise. Heck, even if you haven’t go ask for a raise anyway. The worse that can happen is that they say no, in which you will have to make the decision to either stay and work on your performance or leave to find a company that will pay you what you’re worth.
Allowing Money Blocks to Run Their Lives
This is something I could write an entire book about. What we believe and feel about money can determine how we respond to the way we make, keep and spend it. Women tend to believe that it’s not ladylike to worry about money or that they are somehow being callous if they want to make more of it. This thinking is detrimental to a woman’s financial health is preventing women from making more money.
As a highly educated group of the population, there’s no reason why women should be relegated to making less than men or worse, believing they should. Of course, sexism and inequality still exist, but women can begin demanding and expecting more when it comes to money. I’m an entrepreneur, so my mindset is always on finding additional ways to bring in money. Let’s face it, I’m a single woman and I really can’t depend on anyone else to eat. Not everyone sees it like this, though.
Case in point, one day I shared with her a business opportunity I was considering with a dear friend of mine. Her response smacked me upside the head because she told me that all I wanted to do was make money. She also told me she had enough and didn’t need to make more. I was confused, but I wonder did she feel insecure about her own money situation. Here I was making twice what she made and I all I wanted to do was talk about how to get more.
I don’t look down on anyone and I don’t equate my self-worth with the money or assets I have. I’ve been broke and I’ve had money in the bank. I can tell you that having enough money to pay your bills and still enjoy life is a wonderful feeling.
Men know this and do not feel bad one bit for going after money. Women shouldn’t either.
Not Having Multiple Streams of Income
Whenever I mention multiple streams of income, people think I want to talk to them about starting a business. Yes, I’m entrepreneurial minded but you can have multiple streams of income coming in while you still have a 9 to 5 and without running a business.
No one is staying at their place of employment for 30 or 40 years anymore. The bad mood of the economy makes it shaky ground for you to depend on one source of income, which is usually the paycheck from your job. Even if you are a model employee, there’s no guarantee your employer won’t outsource work to another country or close shop up entirely.
Once you become unemployed, it may take months for you to get another job. If you don’t have any savings in place, you’ll spend time trying to play catch up on bills. I’ve seen families go through foreclosure after losing their one stream of income. My friend was disgusted by my need for multiple streams of income, but I find it a necessity in this day and age. You can no longer place your faith on one income stream.
If you don’t have a side hustle, I recommend getting one now. If you like to cook, start catering. If you like planning parties, be an event planner or host and plan cabaret parties. Of course, you could always start a blog. Here are 21 surprisingly easy ways to earn more money each month.