Fight to be a FINANCIAL FEMINIST
From the gender pay gap to the ‘pink price premium’, women face inequality over money. Now a new book tells how to...
FOR more than a decade I’ve spent my life thinking and writing about money. As a financial journalist, I’ve written hundreds of columns on the City, the stock market, the super-rich, pension funds and family budgets.
I don’t think money buys you happiness but I know it gives you freedom. Having enough money gives you choices about where you live, what you do for work and how you spend your free time.
Which is why what shocks me most, after all that time spent analysing money, is that women still have so much less of it than men. Money is the last area of gender inequality that has yet to be seriously tackled. And I believe it’s the most important.
In every part of our lives that touches on money, women are disadvantaged, from work to state benefits, savings to childcare and entrepreneurship. Essentially, it is accepted as natural that at all stages of life, women are poorer than men.
As I researched my new book Why Women Are Poorer Than Men And What We Can Do About It, each fact I uncovered fuelled my anger at this obvious injustice.
It’s not just the 18pc gender pay gap — which at the current rate will take 257 years to close — but the 40pc pension savings gap, which means when we talk about poverty in old age, we are really talking about women.
It’s the fact that just one penny in every pound of venture capital investment goes to start-up businesses led by women. That there are more men called Dave running the UK’s top 100 companies than there are women with any name; and that even those who reach the top are paid a fraction of what their male peers earn.
In August 2019, the six women leading FTSE 100 companies earned 4.2pc of the total pay awarded to all FTSE CEOs; and of the 1,000 wealthiest people in Britain, only 150 are female.
Pink and shrink
IT IS also far more expensive to live as a woman than as a man. Women spend more on underwear than men because we wear bras (spending about £2,700 on them over a lifetime) and tights, which cost more than socks (£3,000 over a lifetime).
Make-up, hair products and personal care all cost money — and while men shave their faces, women remove hair from larger areas (a lifetime of shaving costs a woman £6,500, or £23,000 for waxing).
Then there is the ‘pink premium’ added to anything from toiletries to stationery and toys marketed at women and girls, while identical products branded for men and boys cost much less.
Pink it, shrink it and raise the price: this has been the tactic of marketing teams, which have spent decades launching ‘female’ versions of ‘male’ products — and it is more expensive to dry-clean a blouse than a man’s shirt. A shorthaired woman can still pay twice as much for a trim as a man does.
Poverty trap
BUT women are poorer than men all their lives. Why? It is often said that it’s because they take career breaks when they have a family and are less ambitious when they return. But it strikes me as ludicrous to suggest that a woman should earn less than a man because she has taken 18 months of maternity leave during a 35-year career, or that she shouldn’t get promoted because she is a mother.
In fact, women are much more likely than men to carry on training and gaining skills at work (76 pc of adult learners are women), which surely scotches the myth of the ‘working woman who is so distracted by family duties that she can’t give her all in the office’.
Let’s face it, the real reason why women fail to earn as much as men all their lives, have fewer assets and can’t save as much, is because of sexist attitudes that automatically assume men ‘deserve’ to be paid more. Studies prove we have all internalised these false beliefs.
So what can we do about it? Changing these structural inequalities will take collective action, a toughening of equal pay law and a big shift in attitude.
But there are things we can do on a personal level, too.
Get resilient
JUST as we look after our bodies by watching what we eat and exercising, our skin by following a cleansing routine or our minds by meditating, it’s time women cared properly for their bank balances. Every woman could benefit from adopting the mindset that nurturing your money is a vital part of self-care.
Let’s take one of the biggest buzzwords in wellness: resilience. It’s a concept you can equally apply to money.
Financial resilience is taking steps to ensure you have enough to pick yourself up if you get knocked down; it’s showing you care about your future self as well as your current self. And the first principle of financial resilience is to have enough cash saved — in an easy-access account — to cover between three and six months of expenses, including rent or mortgage payments, essential bills and food.
This is your cushion against potential bad times including job loss, divorce, a death in the family or serious illness.
I like to think of it in psychological terms too: as building a more solid foundation from which you
can grow. Simply having savings builds confidence.
Often it is money, or rather the lack of it, that stands in the way of people achieving their dreams — so having some put aside allows you to dream as well as giving you ‘head space’ from worrying.
Saving is also about having money to enjoy life. So once you hit the target for a foundation fund, move on to a bigger goal. In a nod to the couch-to-5k running challenge, I call it the Zilch to 10k — but you can break it down into Zilch to 1k, 2k or go higher.
Now be bold
AT THIS point, don’t be put off the idea of investing your money rather than simply saving in cash accounts.
One of the most patronising and damaging myths around women and money is that we don’t like risk.
this mantra is repeated so often, not least by financial advisers and banks, it has become a self-reinforcing truism.
If women are continually told they don’t like risk, they are less likely to think they are good at taking it.
In fact, several studies have found that when women do play the stock market, they outperform men. One showed women investors beating male investors substantially, by making 1.94 pc more than the FTSE 100 index each year to the men’s 0.14pc.
Yes, culturally, with its baffling jargon, masculinity and elitism, finance has become a macho sport. It carries connotations of greed, gambling and one-upmanship. But investing is like the weights section at the gym: there is no reason why it should be exclusively male. there are investment websites, known as ‘platforms’ or ‘investment supermarkets’, which allow people like you and me to invest our money in stock markets. In the UK, among the most popular are hargreaves Lansdown, AJ Bell and Interactive Investor. Do your research, read the City pages and watch stocks first, to get an idea of how prices change.
Over to you
ANOTHER vital part of financial self-care is to prioritise yourself.
Women always put their monetary needs at the bottom of the pile. Couples tend to pay for childcare out of the woman’s salary and save for their children’s future before their own — it’s incredible how often people admit they have money in a savings account in their child’s name but barely anything put away for themselves. even the occasional £20 put into a pension pot adds up.
If your partner is the higher earner, make it their responsibility too — the epic task of saving for retirement is one that should be shared between you.
Financial self-care requires setting aside time to think about money. It takes only a couple of hours a month. What did you spend in the past four weeks? Did you have enough to last until payday? Is there anything you need to buy soon that needs planning for? Do you regret any purchases?
this kind of thinking gets you organised and puts you in the right frame of mind.
then take action — swap utility providers once your contract is up and move your credit card balance to an interest-free card. Find out the passwords to your joint accounts if you don’t know them (too many of us don’t!) in case the worst happens.
Like other forms of wellness, financial resilience is a fantastic stress-buster.
It won’t solve the big economic inequalities that women face in society — that’s a campaign we must wage together — but it’s a start.
ADAPTED by Louise Atkinson from Why Women Are poorer than Men And What We Can do About It, by Annabelle Williams (£14.99, Michael Joseph), out now.