Combating the Extra Costs of Being a Woman

by | May 20, 2019

We all know being a woman comes with financial challenges. First, there’s the wage gap — in 2018, women earned about 85 percent of what men earned, according to Pew Research. Sad but true: it would take women an extra 39 days (roughly two months) of working full-time to make the same as men.

To boot, there are extra costs on products. For one, there’s the “pink tax.” No joke. Women pay more for products geared toward females than for items are targeted to men or are gender neutral. That goes for anything from clothing to shampoo and deodorant. How much of a “tax” are we talking about here? According to a study on gender pricing by the New York Department of Consumer Affairs, women pay about 7% more on consumer goods than men.

There’s also the fact that the wellness industry is making a killing on women’s insecurities and need to be “perfect.” The weight loss industry is worth $66 billion, and recent research reveals that women spend an average of a quarter of a million dollars on their appearance in their lifetime.  

It certainly stinks big-time, but there are ways we can fight the extra costs of being female. Here’s how to do it:

 

Know Your Worth

First things first: know how much you’re worth in the workplace, and negotiate accordingly. There are a handful of negotiating tactics to leverage your experience and education to secure a sweeter compensation package. Be sure to check how much you should be making by scouring salary comparison sites such as PayScale, Glassdoor, and Simply Hired.

You should also rack and quantify the value of your contributions in the workplace. When negotiating salary, ask for a specific number. Steer clear from giving your potential employer a range. That’s because when you give a range, the hirer will most likely offer what’s on the lower end of your range. And of course, consider job-hopping if you’re not being compensated fairly.

 

Grow Your Money

Do all you can to build your wealth and stretch every dollar. Remember: there are numbers more important than your income, and net worth is one of them. Not exactly what net worth means? It’s simply your assets — income, home, car, money sitting in your bank and retirement accounts — minus your debt (think credit card debt, personal loans, student loans).

To grow your money, invest in courses or opportunities that could further your career or make you more valuable in the workplace. In turn, you can ask for more. You might consider spending less on clothing, makeup, and personal items so that you can invest in future you. In turn, that will build your net worth.

You don’t need to know a ton about investing to get started — nor have a lot of money, Micro-investing platforms such as Stash and Acorns let you invest with just $5. If you’d like to invest in businesses that are in alignment with your values, check out impact investing platforms such as COIN and Swell Investing.

As a freelancer, I’m always drumming up ways to build my business. I spend less than I earn, try to lower or cut costs within reason and invest what I can. When I see my investments growing, I’m even motivated to contribute even more to my savings. It can be hard. But it makes me feel like I’m rebelling in my own tiny way, and winning financially, despite the odds.

 

Save for Retirement

Women typically need to save more for retirement than their male counterparts. For one, they tend to live longer than men. And because they tend to earn less than men, they might have less in Social Security benefits.

But here’s the tea: women, on average, save 40% less than men. And despite needing more for retirement, they are only saving half as much.

Consider saving part of any money you can free up towards your retirement. That includes money you earn working overtime,  bonuses, raises, or “extra cash” you receive in the form of a birthday gift.

How much should you save? My friend and colleague Kristin Wong says that you should ignore the “save 10 percent of your income for retirement” rule. Instead, you should save what you need. Figure out how much of your pre-retirement income you’ll need to save, and what kind of lifestyle you would like to have in your golden years. You’ll also need to look at your entire financial picture, and how much money is coming in and from where.

As a self-employed freelancer, I auto-save my Roth IRA and contribute the full amount. I also invest the funds in my HSA account for retirement. And when I can swing it, I make contributions to my solo 401(k) account.

If your employer offers a 401(k) plan, consider auto-saving a percentage of each paycheck. Check and see if you can ramp up the percentage every few months or so.

Here are some additional ways you can save some money, which could go toward building your net worth:

 

Look for Real Deals

Buy One Get One free, flash sales, and so-called “deals” will only have you spending more. Instead, ask yourself what you really need and research beforehand to see how you can snag the best deal possible. Your wallet will certainly thank you.

 

Focus on Personal Style, Not Fashion

Fashion is ever-changing. And trying to stay in step with what’s hot can cost a pretty penny. You might pay full price for fashions that are in season, but not really you. Instead, focus on a style that reflects your taste and personality. When you focus on your style, you’re more true to you. Plus, you might feel more freedom to buy second-hand, fewer items, or even shop in your grandma’s — or dad’s  — closet!

 

Shop Used

Besides local yard sales or thrift shops, there are a handful of great ways to buy second-hand. E-commerce platforms such as Poshmark, ThredUP, and Tradesy make it easy to buy designer clothes at a fraction of the price. You can be stylish without going into debt.

 

Join Freebie Groups

Freebie exchanges such as the Buy Nothing Project and time banks are great ways to snag clothes and household items for free. They’re also a great way to build community and meet fellow frugally-minded ladies. I’ve scored brand-new dresses, accessories, and kitchen wares through free swaps through these groups.

As the feminist anthem by Dolly Parton, “Just Because I’m a Woman,” points out: Women face a number of double standards. But that doesn’t mean we have to stand around and do nothing about it.

Fighting the additional costs of being female is a two-pronged approach: drumming up tactics to earn more and build your wealth, and finding ways to save on purchases that might cost more just because you’re a woman.

 

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