Five Steps Women Can Take Toward Financial Empowerment
Dear Carrie: Despite our many advances, it seems like women still fall behind men when it comes to money. Is that true? And what can we do to catch up? -- A Reader
Dear Reader: Your question is spot on because, yes, women are still behind men financially. And yes again, there are definitely things we can -- and must -- do to catch up.
The encouraging news is that women have come a long way in terms of education and participation in the workforce. In fact, according to recent analysis from Pew Research, more women than men in the labor force have bachelor's degrees, and women 25 and older now represent more than half of college-educated workers.
However, the news isn't quite as good on the economic side. Again from Pew Research, although the wage gap between men and women has narrowed somewhat in the 25-34 age group, full-time working women still make roughly 80% of what men earn. And this has a lot of economic repercussions -- both present and future.
Salary differences don't just affect our day-to-day spending decisions; they also affect our ability to save and invest for the future. Statistically women live longer than men so we generally need to save even more. But earnings are only part of the story. In spite of professional advances, women are still struggling against some cultural stereotypes that, whether we like it or not, affect how many of us relate to money.
A lot has been written about why many women don't engage more directly with their finances. Some of us underestimate our financial abilities. Or we've historically relied on men. Or, all too frequently, we haven't had strong female financial role models. But whatever the reason -- and whatever provides the wake-up call -- women need to be actively involved.
Five Steps to Financial Empowerment
While the need for women to engage in their financial lives is urgent, I also find it exciting and empowering! By taking charge of your finances, you're taking charge of your life. Here are five practical things you can start doing right now:
1) Make Retirement a Top Priority
Women often put others' needs ahead of their own, but when it comes to retirement savings, you have to be more focused on your own needs. Make sure you contribute to your 401(k) or other employer plan at least up to the company match and more if possible. Don't have a company plan? Open an individual retirement account.