SURPRISING SECRETS TO Earning MORE
The Wealth Gap
According to the Institute for Women’s Policy Research, in the United States women still earn less than men. This gender wage gap has been getting worse in recent years, with women making about 83 cents for every dollar earned by men for comparable work. This means that women have to work an extra 39 days to make what men do in one year.
The good news is that the gap is slowly but surely narrowing. In 1980, women earned just 62 cents for every dollar earned by men. So while there’s still a long way to go, women have made progress in terms of earning power.
The gender wage gap is complex, and one contributing factor is women’s career choices. Women are more likely than men to work in lower paying occupations, such as teaching and nursing. They are also more likely to work part-time or take time off to care for children or aging parents. In 2022, however, women have outnumbered male students in both law and medical school, so there’s hope.
Why Women Undersell Themselves
The relational nature of women is a big part of why women undersell themselves. In general, women are socialized to be people pleasers and to prioritize others’ needs over their own. This can lead women to accept lower salaries than they’re worth or to forgo negotiating altogether out of fear of conflict. I’ll never forget Mikelann Valterra’s seven reasons to charge at the top:
Education
Experience
Referrals
You know you’re getting results.
You provide a specialized service.
Your business is very professional.
You ask for it.
This tendency to undervalue themselves can also be seen in women’s investment behavior. Studies have shown that women tend to be more risk-averse than men, leading them to miss out on potential rewards. This may be because women are socialized to play it safe and avoid taking risks.
Coaching Advice for Couples
Another way to address the wealth gap is at home. If you’re struggling to talk about finances with your partner, you’re not alone. The best way to start is by having an open and honest conversation about money and its impact on your relationship. If you’re someone who literally cannot find the words or overcome the inertia in initiating this conversation, using my Financial Partnership Questions script is a good place to start. Talking about money can feel sensitive and even stir up deep emotions, but being honest and discussing your entire financial picture is essential. Money can become a topic to bond over and will absolutely help you make joint financial decisions and plans and avoid any arguments or conflicts down the road.
Let’s face it, dealing with money is something we have to embrace nearly every single day of our adult lives through work, family, bill paying and ongoing lifestyle choices. Routinely setting aside time each month to review your finances together can be helpful. This is only going to be productive, however, if you have a tracking system in place. Banks, credit cards and popular apps like Mint and Simplifi do a reasonable job of providing feedback. However, if you let an algorithm do all of the categorization for you, it’s not going to be totally accurate since our financial lives can be quite nuanced. This is where a bookkeeper or financial coach or counselor can be very supportive. A solid financial partnership entails regular check-ins, sharing goals, expanding your financial support team as needed and increasing your sense of financial literacy on an ongoing basis.
Financial intimacy
We all know good communication is critical in any relationship, but did you know it’s also essential to finance wellness? That’s right, the ability to face your finances and talk about money, without fainting or emotionally collapsing, is crucial to maintaining a healthy financial life and getting what you want. After all, you cannot make sound decisions about your money if you’re not able to put words to the numbers as well as your feelings and desires about spending, saving and earning.
Communicating openly about your finances is essential in taking control of your money. It doesn’t have to be complicated or overwhelming, but I know it can feel that way at first. Start developing this healthy habit by setting aside time every month, or even every week if you’re really resistant, to look at your spending. If you practice this kind of exposure therapy approach, you’ll be well on your way to feeling secure, happy and confident about money.
Conclusion
Women have made great strides in recent years, but there’s still room for improvement. Women can start winning with their finances by understanding the reasons behind these disparities, educating themselves, empowering girls to be smart with money from a young age. By around 7 or 8, “the age of reason” the way we talk about money with all children matters including: career choices, what we’re modeling in terms of spending, consuming and saving as well as how emotionally regulated we can remain when dealing with financial matters. Creating a sense of financial abundance in your life is an inside job. We all need to be fluent and confident in managing and speaking about household finances, budgets and savings goals so we can go out into the world and stand on our own two feet. With some knowledge, courage and effort, anyone can take control and actually shape their financial future.