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Dear Carrie,

Despite our many advances, it seems like women still fall behind men when it comes to money. Is this 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 Center, more women than men in the labor force have bachelor’s degrees, and women ages 25 and older now represent more than half of college-educated workers. However, on the economic side, the news isn’t quite as good. 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 percent 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 ability; 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 wakeup 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, to me, it’s also 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.


Women often put the needs of others 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 IRA.

If you start saving in your 20s, you’ll need to put aside 10-15 percent of your income for retirement. But if you wait until you’re 40, you’ll have to save a whopping 30 percent of your salary. While those numbers may be sobering, so are some statistics from the Department of Health and Human Services. According to the 2018 Profile of Older Americans, almost half of all women 75 and older live alone. We need to be prepared.


Part of that preparation is learning to make the most of your money, and that means investing. Studies show that women are more cautious than men when it comes to the stock market. Overall, we invest 40 percent less money than men do—even though other studies show that women tend to earn higher returns than men!

Long-term, that hesitancy to invest can put us at a real disadvantage. Especially for something with a long time horizon such as retirement, you ideally want a diversified stock portfolio that’s positioned for growth. Which translates into taking a bit more risk. While that can sound daunting, it doesn’t have to be when you take that risk and structure your portfolio in the context of a well-thought out financial plan.


When it comes to investing and managing your money, having a support team can be a great confidence booster. So even if you’re just starting out—and especially as your assets grow—consider working with an advisor. I think of a financial advisor sort of like a personal trainer, someone to guide you and keep you going on the right path, even when you might otherwise lose focus.

An advisor can help you look at the big picture, focus on retirement planning and build a well-diversified portfolio. And working with an advisor who understands you and your goals can be a major source of peace of mind. So think about the type of person you’d be most comfortable with. A lot of women prefer to work with a female advisor. But gender aside, look for someone with whom you can communicate easily.

Financial advice comes in many forms and how much you want to work with your advisor is up to you. You might be satisfied with a one-time consultation or periodic check-ins. Or you could opt for full-time asset management. If you go this route, just make sure you understand and are comfortable with the way your advisor is compensated.


Whether you work with a certified financial planner or prefer a more DIY approach, having a financial plan can make a real difference in your sense of financial security. A recent Schwab study on women’s confidence levels in managing their finances indicated that women with a written financial plan were significantly more confident—and less likely to lose sleep over their finances—than women without a plan.

This backs up my own opinion. I’m a huge advocate of having a financial plan because it goes beyond saving and investing to look holistically at all the interrelated parts of your financial life. It reviews your income, expenses, investments, retirement planning, insurance coverage, income tax liability, estate planning needs and desires and—most importantly—how they all work together. Plus it gives you a roadmap to follow.


Female or male, single or married, all of us need to be actively involved in our financial lives. Don’t be afraid to ask questions. Seek out help when you need it. And realize that it’s your money, it’s your life—and ultimately you’re in charge.

Finally, as you get on top of your own finances, share your experiences. Talk to other women. Expand the financial conversation. Together we can buck the stereotypes and become the CEOs of our own financial lives.

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