Women and financial stress

on April 09, 2024 / by Financial Mindfulness

Women and financial stress.

Financial stress is a universal challenge that knows no boundaries, affecting individuals and households across the globe, in particular women and financial stress.

However, beneath the surface of this pervasive issue lies a stark reality: women often bear a disproportionate burden when it comes to navigating the complexities of financial stress.

From wage disparities to caregiving responsibilities and systemic inequalities, there are myriad factors that contribute to the heightened susceptibility of women to financial stress.

Exploring the root causes of this gender disparity and shed some light on the ways in which women are uniquely impacted by financial strain and suffer more from financial stress.

The Gender Pay Gap

Despite advancements in gender equality, the gender pay gap remains a persistent issue, with women earning, on average, less than their male counterparts for performing the same work.

This wage disparity not only diminishes women’s earning potential but also limits their ability to accumulate savings, invest in their futures, and achieve financial independence.

As a result, women are more likely to experience financial instability and vulnerability, making them particularly susceptible to the impacts of economic downturns and unexpected expenses.

According to the World Economic Forum’s – Global Gender Gap Report 2023 which have been covering 102 countries continuously, 2006 – 2023, the 2023 Gap is 68%.

At the current rate, it will take 131 years to reach full parity. Australia is ranked 26^th at 78%, lagging behind men by 28%.

Wesley Walden, Managing Partner, McKinsey & Company, Australia and New Zealand commented on the latest Australia Gender Pay Gap Report 2024

‘Our gender pay gap is simply not where it needs to be. It highlights the challenge we continue to face in reaching gender balance at all levels of our firm in Australia and New Zealand, particularly in our leadership, despite many years of work attracting, growing and developing women talent. Reducing and ultimately closing the gender pay gap remains a top priority’.

Caregiving Responsibilities

Women are disproportionately burdened with caregiving responsibilities, including childcare, eldercare, and household management.

While these responsibilities are often unpaid or underpaid, they can have significant financial implications, including reduced workforce participation, lower earning potential, and increased expenses associated with caregiving duties.

This is reflected in the figures from the Australian Taxation Office’s recent statistics report showed the average superannuation account balance for; men $161,834 versus $129,506 for women, a $32,328 difference or 20% less.

Systemic Inequalities

Structural and systemic inequalities, including discriminatory practices and policies, further exacerbate the financial challenges faced by women.

From lack of access to affordable healthcare and childcare to limited representation in leadership positions and decision-making roles, these inequalities perpetuate cycles of poverty and marginalization.

Cultural and Social Norms

Societal expectations and cultural norms surrounding gender roles and financial responsibility can also contribute to women’s experiences of financial stress.

Women may feel pressure to prioritize the needs of others over their own financial well-being, leading to feelings of guilt, shame, and inadequacy when facing financial challenges.

Moreover, the stigma surrounding discussions of money and personal finances can inhibit women from seeking support and resources to address their financial concerns.

Women and financial stress is a complex and multifaceted issue that requires a concerted effort to address.