When You’re No. 2
WE ALL KNOW financial literacy is important. But it’s especially important if you’re a woman.
According to the Gates Foundation, “No matter where you are born, your life will be harder if you are born a girl.” Today is Equal Pay Day—the day when U.S. women finally earn enough to “catch up” with men’s earnings from the previous year. Women in the U.S. earn 82% of what men do for equivalent work and, as a result, suffer a 33% wealth gap. Women also have less access to borrowed money than their male counterparts.
All this leaves women with less control over their daily life. Think about a female applicant who is rejected for a new job because of her weak credit report. Or a woman who’s stuck in a relationship because her husband controls the family’s money.
More than 50 years ago, Avis ran an advertising campaign that said, “When you’re not the biggest in rent a cars, you have to try harder. We do. We’re only No. 2.” I’m not advocating that women accept today’s unfairness. But gender inequality isn’t going away any time soon. In the meantime, women will have to work harder and know more to propel themselves ahead—and financial literacy is one way to compete better on an unequal playing field.
Marcus Aurelius, the famous stoic Roman emperor, wrote in his Meditations that “if you submit to the frustration with a good grace, and are sensible enough to accept what offers itself instead, you can substitute some alternative course.” Here are five workarounds that I’ve found have provided “alternative courses” for me:
- Be a smart consumer and self-advocate. Because of the pink tax, women get hit twice—first with less pay and again when they pay more for products. What to do? Think unconventionally. For instance, there’s no difference between men’s and women’s tennis shoes, so I often buy men’s—because they’re cheaper. Don’t be intimidated. Ask questions and negotiate for a better deal, especially on a big-ticket item like a mortgage. Advocate for yourself in your career by asking for a raise or promotion, or by negotiating for better benefits.
- Understand the importance of credit scores. Sellers want to give the best deal to their best customers. An excellent credit score will put a woman in an elite group of customers, giving her more power to obtain the best rate on a mortgage or a credit card, and lower premiums on homeowner’s and car insurance. That higher credit score can also get you quicker approval from utilities and cellphone companies. More employers are using credit histories when conducting background checks for both new and existing employees. This can impact the hiring and advancement for women.
- Understand the power of compounding. Combined with time, compounding can turn regular savings into a large nest egg. It’s crucial to save as much as you can and as early in your adult life as you can. But compounding can also work against you: Cumulative interest on loans can turn a molehill of debt into a mountain. Avoid credit card debt. Keep other borrowing to a minimum.
- Similar to compounding, small positive steps can produce extraordinary long-term results. Take good care of yourself physically and mentally. Eat healthily, stay physically active and get enough sleep. These small positive habits will help reduce medical costs, both now and in the future. More important, they’ll help you to feel good, reduce stress and have the confidence to face life’s challenges.
- If you aren’t used to making financial decisions, start small, but start somewhere. Overwhelmed by the idea of buying another car? Try purchasing new tires for the car you already have. Don’t have a checking or savings account in your own name? Find a bank that has no required account minimum, so you can start saving sooner rather than later. Do research ahead of time, so you go into these transactions with confidence—and come out with what you want.
In 2017, Jiab Wasserman left her job as a financial analyst at a large bank and is now semi-retired. Her previous articles include Grab the Wheel, In Withdrawal and Time Well Spent. Jiab and her husband Jim, who also writes for HumbleDollar, currently live in Granada, Spain. They blog about downshifting, personal finance and other aspects of retirement—as well as about their experience relocating to another country—at YourThirdLife.com.
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