A recent Women in the Workplace study notes that when it comes to gender equality and representation in the workplace, we still have a long way to go. That's particularly true when it comes to advancement. According to the study, the ratio of men to women becomes progressively more uneven the further up you go in a business, from entry level to VP to CEO. Companies miss out on valuable perspectives when they lack diversity at the upper levels, and from a personal finance standpoint, it means there are fewer women in higher-paying jobs. Add that to the continued universal wage gap, and the financial implications are even stronger.
Long-term financial consequences
The push for gender equality in the workforce has been long and tiresome, but women need to push harder than ever. One key reason is that they remain underfunded for their retirement futures. Because women tend to live longer than men, they'll need to set aside more for retirement, yet men's balances are, on average, 50 percent higher than women's. That's despite the fact that women are less likely to demonstrate risky investment behavior.
The average account balance for men last year was $123,262 compared with $79,572 for women. That chasm may largely be attributable to the difference in earnings. As the wage gap narrows, as I'm confident it will continue to do if women push for the equal pay they deserve, then women must ensure that the retirement gap narrows accordingly.
For that to happen, women need to put their finances at the top of the priority list. It may not be easy to do with jobs and families and a limited number of hours in the day, but the rewards are worth it.
Benefits beyond finances
There have been huge shifts in gender roles during the past few decades, and it seems each generation of women is contributing more to the financial well-being of their families. There has been a corresponding shift in the female mindset and how they think about financial planning, but we're still not seeing them actually take action. They must be as equally engaged as their male counterparts when it comes to personal finance decisions and investments.
As women, we need to be much more engaged in the financial process. I encourage you to take action for your financial future. I've seen many women build the confidence they need to take a more proactive approach toward their finances, and the benefits spread to other areas of their lives too. Taking control of your financial future can often help give you the confidence and knowledge you need in other areas of your life, including your career. Understanding finances at home can help you understand them at your company as well. That results in a win-win situation where your improved finances help your professional life and vice versa.
The good news is that during the past several years, more and more women have realized they need to do something different when it comes to planning for the future, and we're seeing the start of that shift.
It's important for women to take actionable steps in planning for the future - whether that's saving for retirement or working toward a promotion. For some, simply taking small steps can help them feel empowered and gain the confidence needed to make important decisions.
Don't wait. Women everywhere are working hard for their careers and their salaries. In turn, they must make that money work hard for them and plan now for the life they want.