Women’s financial freedom is in danger. Already concerning figures on women’s finances, such as the fact that women were prevented from certain job fields such as driving buses, mining, or fixing machinery, and 59 percent of women’s spouses control money in their household, were known prior to the pandemic. When COVID-19 began, women disproportionately lost their jobs on top of a skyrocketing demand for at-home care.
“It shows what was built on sand,” explains Sallie Krawcheck, CEO of Ellevest—a wealth management system built by women, for women—and women’s financial advisor. “[The pandemic] is showing the rickety foundation that gender equitable work was built on. It was never 'who wants to work’ but rather ‘who has access to resources in order to work.’”
Sallie Krawcheck joined a seminar hosted by Women for Women International to explain the importance of women’s economic power together with Anoushka Mehta, Head of Gender Lens Finance at HSBC and one of our board members. Take a look below at Sallie’s advice on steps we can take to invest in women’s financial power individually and together.
1. Focus on a vision. What matters most to you?
“Nothing bad happens when women have more money,” explains Krawcheck. Economies boom when women take control of what they want in planning their financial future, both personally and professionally. When women hold a high leadership role in companies, the organizational effectiveness and overall business performance grow significantly.
For personal finances, she recommends setting up the 50/30/20 rule, with “50 percent of money spent on needs, 30 percent spent on fun, and 20 percent invested on the future you,” as a guide to maximizing economic savings.
Krawcheck urges women to break the status quo, whether it’s starting an initiative on an issue you are passionate about or setting a goal to be at the top of your profession. Because women often take direction from men on how to run businesses, Krawcheck also tells women to think outside of the box when making their professional economic plans.
“Don’t be afraid to fail,” Krawcheck says, “and be ready for it to be hard.”
2. Shift women’s financial power from an individual sport to a team sport.
“Men play business as a team sport, and they’re winning. For women, however, we have internalized that business is an individual sport.” Krawcheck explains that while men commonly use personal connections in business (for example, persuading their colleagues to hire male friends and family members), the technique has historically hurt women and upheld harmful stereotypes.
Women are approximately 52 percent of the US workforce, direct 85 percent of consumer spending, and have 5 trillion dollars in investable assets. If women banded together internationally, invested in women-owned businesses, and upheld other women in our personal and professional lives, Krawcheck notes, we could change how the entire world sees women in business.
“If not us, who? We have to take action; we can wait for other people to do it, but it won’t work.”
"If women banded together, invested in women-owned businesses, and upheld other women in our lives, we could change how the entire world sees women in business."
3. Change the narrative we tell women about their spending and investing habits.
The most important thing women can gain to take control of their finances is agency and autonomy; however, women often believe they aren’t good with money and that they don’t deserve to invest and spend their money. Krawcheck notes that only a single-digit percent of women invest individually, and even less than 15 percent are joint investing with a spouse or partner.
The stories we tell women about their ability to invest and spend are taught young: “Little boys see daddy investing, little girls don’t see mommy investing.”
Traditional media also plays a role. When discussing women’s finances, over two-thirds of the media is negative, patronizing, or uses some form of gaslighting. Women can stop the cycle of blame by understanding their purchases’ benefit for the economy as a whole.
“Women are told if they ‘don’t have a latte or get a pedicure,’ then they can be a millionaire,” says Krawcheck. “When you ask a man about money he says ‘power, strength, independence,’ but when you ask a woman she says ‘loneliness, isolation, uncertainty.’”
4. Stop blaming women for not returning to work because of COVID-19.
COVID-19 is not described as the ‘economic she-session' without reason. While women’s job productivity took a hit, it’s because they’ve shouldered the burden of both housework and childcare with no support as the world went remote. Because of this, studies show men are being promoted three times more than women—at the expense of women’s labor.
Also, as cities begin to re-open worldwide, men are going back to work at a greater rate as childcare facilities and schools remain closed. Familial economic difficulties also make it difficult to pay for childcare, a luxury which took up to seven percent of family income in the United States within 2018 alone.
5. Transform the way we measure women’s economic performance, now.
While the gender pay gap is at 82 cents to a dollar, the average gender wealth gap is at 33 cents to every dollar a man has. For women of color, this number is at approximately 2 cents to every dollar. Because of this, Krawcheck believes we could use a complete overhaul in how we measure women’s financial power.
Wealth shows how much money women have and keep for the remainder of their lives. Because we know that, on average, women earn less, experience earlier peaks in their professional salaries, and live longer, focusing on how they can keep and multiply their earnings is necessary if we want to improve gender equality as a whole.
Throughout the years, Women for Women International has invested in women’s financial and economic power because we know that everyone benefits: Stronger women make stronger nations. We bring women together to support each other’s businesses, through savings groups where they create credit for their enterprises or in business collectives.
And women are learning that their work matters, whether it’s at home or in their community. Women having more wealth and agency over family financial decisions doesn’t weaken anyone. It strengthens all of us because women reinvest their power into their family and future generations, benefitting communities.
Krawcheck says it best, “We are all aligned in different parts of the world and in different ways, so that when you raise up women, you raise up everyone.”
Want to learn more? Watch the full event video to gain more helpful knowledge from Sallie Krawcheck: