In recent years, there has been a growing awareness of the importance of gender equality in all aspects of life. Despite progress made in many areas, when it comes to personal finance matters, women still face numerous financial challenges that put them at a disadvantage to men.
For instance, women still earn less than men on average and are often the primary caregivers in their families. This can lead to gaps in employment and savings, making it more challenging to manage finances. In fact, according to a report by the European Institute for Gender Equality, women in the European Union are 39% more likely than men to have a gap in their employment history, more likely to have part-time jobs and earn less than men; all of which create a unique financial challenge for women and can have a significant impact on their ability to achieve financial stability and security.
Here we will explore some of the key issues related to female finances and the “gender finance gap” and highlight some of the things businesses and women can do to help bridge that gap.
Issue 1: Less Confidence in Managing Money
One of the most significant challenges that women face when it comes to finances is a lack of confidence. According to a study by the European Central Bank, only 43% of women in the European Union feel confident managing their finances, compared to 56% of men. This lack of confidence can have a significant impact on women's financial behaviour, leading them to be more risk-averse, less likely to invest in the stock market, and more likely to leave money in low-interest savings accounts. All of which can see their savings grow at a slower rate than men and, ultimately diminish their future financial stability and security.
Issue 2: Caring Positions and Career Breaks
Another challenge that women face is the fact that they often hold caring positions in their families, which can lead to gaps in employment and savings. Women are more likely than men to take time off work to care for children or elderly relatives, which can result in fragmented careers, slower career progression, lower earnings, reduced savings and reduced pension entitlements. In fact, women in the EU are twice as likely as men to have part-time jobs, and on average, earn 14% less than men, largely as a result of the caring commitments they have to undertake.
Issue 3: Gender Pricing - The “Pink Tax”
In addition to these challenges, women also face issues with gender pricing or what is sometimes referred to as a "pink tax". This is the widely common practice of charging women more for products and services that are identical or similar to those marketed to men. This is particularly true for personal care products like razors, deodorants, and sanitary products, but also for clothing. In fact, a study by the European Parliament found that women pay on average 7% more than men for similar products which adds up over time, resulting in a significant additional financial burden for women who are, on average, already earning less than men.
Bridging The Gap
So, what can be done to address these issues and improve women's finances in Europe?
1. Financial Education
One part of the solution is to promote financial literacy among women. This can be done through education programs, workshops, and online resources that teach women how to manage their finances, learn about investing, and how to plan for retirement. Many businesses also now provide financial education in the workplace as an employee benefit, so ask your employer if they do and request female finance focussed sessions to provide you and your colleagues with the right skills and resources to gain financial confidence and make your money work better for you.
2. Speak Up
Research shows that women are less likely than men to negotiate when it comes to their pay or benefits package. This is probably a result of being generally less financially confident and the impact of having to deal with more fragmented working lives. However, negotiate you must as by doing so you can significantly improve your financial well-being and get paid what you are actually worth!
3. Encourage employers to promote policies which women's participation in the workforce
Paid parental leave, affordable childcare, and flexible working arrangements are employment policies and benefits which can have a positive impact on all employees but especially women. They can specifically help to reduce the gender pay gap, increase women's earning potential, and provide the financial stability need to save for the future. So challenge your employer to be more female-friendly in its approach to working and look at how its policies and employee benefits can help!
4. Shop Around and Challenge!
When it comes to personal care products, compare prices across brands and genders as you may be able to find a cheaper alternative that works just as well. Fundamentally though, there needs to be greater awareness of gender pricing and a concerted effort to eliminate it. This could be achieved through legislation, so challenge your local politician to be a champion against the “Pink Tax” and encourage others to shop around for the best deals, challenge gender pricing when they encounter it and lend their voices to defeating this unfair practice.
5. Network
As statistics show, this is an issue all women are facing so connect with other women in your industry or community who are also interested in improving their financial situation. Share tips, resources, and advice to support each other in bridging the gender finance gap and improving both your and other women’s financial well-being and freedom going forward.
Summary
Women's finances in Europe are impacted by a range of factors. However, by promoting financial literacy, supporting women's participation in the workforce, addressing gender pricing and challenging the status quo, we can work towards greater financial equality for women and the financial future we all deserve.
- Log in to post comments