Financial security for women is much more than just pay equity.
The Global Gender Gap Report published by the World Economic Forum again spotlighted the issue around equal pay for men and women, but is this report telling us anything we don’t know? And is it making a difference to the financial security of women?
Don’t get me wrong: The fight is well deserving. But as a financial planner to women executives, I have to ask if the efforts could be better spent.
{mosads}Rather than just focusing on how much women get paid relative to men, we should be focusing on what happens to the money earned and the money women consistently leave on the table. Only when we as women fully capitalize on what we earn, can we truly achieve equality.
Here are the facts: Women, in general, don’t negotiate what we are worth. We work on average 12 years less than men due to family obligations. We live longer and face higher life expenses like retirement and health care. We are underpaid because of our gender, and these issues just scratch the surface of our financial challenges.
Did you know that over the course of her career, the average women will leave $1 million on the table? This is from not negotiating what she is worth, from taking time off work for family, from lost retirement account contributions and investment gains and from not getting the promotions and raises she deserved because of her gender.
However grim the statistics, we also know that if women have guidance to deal with these major derailers to our financial security, we have much higher rates of being financially successful.
So, what is the solution? To achieve financial security, women need to address the four key financial derailers that throw them off their course to success:
1. Know what you are working for: Think through what your goals are and detail them out. Prioritize what is most important to you.
2. Know where your money goes: Track expenses so you can choose to spend your money where its most important to you, be that your retirement account, savings, travel budget, etc.
3. Have a strategy around your career: This is critical. As the source of your income, you have to have a strategy around your profession from a compensation standpoint. Think through what you want your career to look like and get the resources you need to succeed.
If you need help negotiating what you’re worth, if you want a promotion, need business development skills, whatever you identify as being between you and your professional success, get help.
4. Put in it writing: Commit to incremental steps you are willing to take. Once you’ve committed to a plan of action, your likelihood of success is exponentially greater.
Pay equity is an important issue for sure. But what happens to the money women earn, what they choose to do with it and how they plan around the financial risks unique to women, will make all the difference when it comes to financial security.
Bridget Venus Grimes is the founder and president of WealthChoice, a firm focused on helping women turn their professional success into financial success. She is also a co-founder of Equita Financial Network, Inc., a network of independent, women-led financial planning firms, and the author of “Corner Office Choices: The Executive Woman’s Guide to Financial Freedom.” Learn more at www.wealthchoice.com.