Money matters can be scary. There’s taxes, loans, debt, mortgages, rent (and don’t even get me started on those debit and credit cards). Not understanding money can (and will) matter a lot though, especially if you happen to be a woman. So how can you stay ahead and not sink into a pit of financial despair?
Dr. Daad Rizk, the financial literacy coordinator at outreach and online education, says that some women may need to start their financial planning early to reach their goals as they enter and stay in the workforce.
“Women live five to seven years longer than men,” Rizk says. “They spend 11 to 13 years out of work taking care of their families. This should be factored into their planning for retirement and saving plans.”
It’s no big secret that women tend to leave the workforce to take care of families (shout-out to Sheryl Sandberg for “leaning in”), but Rizk says that women should still have their own spending and savings plan to deal with everyday life and planning for the future.
“Establishing and maintaining a saving account should be on their first to-do list especially when they enter the labor force,” Rizk says. “They need to fully understand the concept of ‘needs’ versus ‘wants’ not just for themselves but also as they deal generously with others.”
“Women tend to spend a little money on a lot of things to give to others, while men tend to spend a lot of money on big things that they can keep and enjoy. This phenomenon causes women to sink in debt without having any assets in return,“ she says.
Knowledge is power (it’s so cliché, but so true) and Rizk says that knowing what to expect once you get out there and start making paper is important in identifying what you need to do to start planning. You’ve heard of white-collar jobs and even blue-collar jobs but Rizk adds one more color: pink.
“Pink collar jobs are traditionally held by female workers; such as teacher, nurse, retail worker, child-care provider, cosmetologist, librarian, secretary,” she says. “These jobs pay much less than white-collar or blue-collar jobs, so they explain the wage gap that exists between men and women.”
She also says that female students borrow the same amounts in student loans as male students but end up in jobs that pay significantly less so their debt to income ratio could be much higher. What does that mean? Planning ahead could keep you from defaulting on loans or living back home with mom and dad (unless that’s what you want, no pressure here).
Whether you’re a money maven or a beginner, everyone can learn an extra tip or two about how to change their money habits and understand why you spend money the way you do.
Photo by Lauren Johnson