A Woman’s Salary and Debt Management

Women, the wage gap, and debt management

If you are a woman, you’re more likely to lose money over the course of your working lifetime than your male business counterparts. That’s a scary thought because it’s the truth. The money you don’t make is money you never get to see. It means you’ll have less money for your bills, buying a home, investments, and retirement plans.

You are probably all too familiar with the statement “A woman earns only 83 cents to every man’s dollar” but you might not know how true this is or why it’s this way. Strategic salary negotiation during your first job and at the start of every new job you take after that will have long-term positive effects on your future finances, your credit score health, and your long-term financial goals into retirement.

The Boston Globe featured an editorial by Evelyn Murphy and E.J. Graff that examined in depth why women are losing more money than men. The article stated that “full-time female workers stand to lose anywhere from $700,000 to $2 million over a lifetime because of gender discrimination. Whether it’s intentional or unintentional, it really doesn’t matter”.

This missing money can ruin a woman’s finances. Some might have to embark upon strict budgeting and a very frugal lifestyle. They might need to put everything on credit cards, destroying their credit scores in the process. They might have to enroll in credit counseling and then a debt management program. They might even have to foreclose on the family home or possibly declare bankruptcy.

Our female community members should take control of their financial futures today. It’s never too late to begin negotiating your way to sounder debt management and a higher lifetime net worth.

Here are some budgeting tips and some money-saving tips for the ladies: https://www.advantageccs.org/blog/single-working-womens-day

Negotiating your salary –

“The Wage Gap,” the title of that Boston Globe editorial, states that discrimination against women in the workplace is still rampant, and is all too often reflected in women’s salaries. It is true that many women forgo the late nights, long days, and weekend business trips necessary for lucrative promotions in order to devote time to family. Some professions such as investment banking or journalism require hours and schedules that make having a family difficult. However, these facts don’t tell the whole story. Women need to take control of how much they earn each year because every extra dollar a woman makes is a dollar put to good use or wise credit score salvation.

Linda Babcock and Sara Laschever are co-authors of a book called Women Don’t Ask: Negotiation and the Gender Divide. The website, www.womendontask.com features some statistics that make a woman’s need to negotiate all the more compelling. Well over three-quarters of women now work outside the home; about one-third of mothers are raising their kids solo, and more than half of all marriages end in divorce. The pressure is on for working women to be breadwinners. But it’s obviously difficult to practice good money management, avoid bankruptcy, and keep credit scores strong on salaries that are too low to live on.

Babcock and Laschever say that 20 percent of women don’t negotiate their salaries at all and among those who do, women usually ask for 30 percent less money than men. This is a defeatist way to go about earning a living and can derail a strong money management plan, but fortunately, a reluctance to negotiate for fear of offending or being rejected can easily be overcome.

Here are a few more salary negotiation tips:

• Don’t commit to one number. When asked how much you are looking to make, give a healthy and reasonable range. The lowest number of that range should be the median salary for your line of work, with cost of living factored in. Add 5-15K to that number to get the higher end of the range. And know your industry! Research how much you deserve to be making, given your experience and education levels.
• Forbes magazine recommends dodging the “How much do you make now?” question. The reasoning behind this mindset is that a low number will be accepted and your new salary will be low-balled because of it but a high number might disqualify you from being considered for the job.
• Never settle on the first number, especially if it’s too low for you. Don’t talk, either. Just wait. Pause, and consider the number. Really think it over first. This will make the employer uncomfortable and chances are good you’ll walk away with a higher salary.
• Never be afraid to negotiate. “Hmmm, that’s a little lower than I was thinking. How about this instead?” seldom costs a woman opportunities but it can allow a woman to gain respect.

Salary negotiations are scary for many women. Fortunately, you can learn how to ask for what you should be making. Think of confident negotiating as a strong asset in a lifetime of strategic money management, as well as a well-paved road to a good credit score and strong financial foundation.

Other ways to overcome the wage gap –

There are other ways you can overcome the wage gap if you are a working woman. Salary negations are a great first step, but what about asking for a promotion before getting one? Many women will not simply ask for a promotion or a raise. Most usually wait until their yearly progress review. Why not simply ask sooner? A smart move would be to try to move up the “ladder” before you decide to raise a family. You’ll put yourself in a better position for when you return to work.

Use social networking sites such as LinkedIn to stay connected in your industry and network with influential people. You could foster positive business relationships that turn into job offers that will pay you a higher salary.

Think about doing a little “self-promotion” or “tooting your own horn”, so to speak. A recent study found that women who made their achievements known to others in the workplace, that 30% of them had greater compensation growth than peers who did not promote themselves. It’s not always easy, but it can be another self-taught valuable skill. It is a good idea to be selective about the moments you do this. It’s also important to choose the right audience for your message (like your manager and not the entire company) and focusing on facts rather than just seeking self-congratulation.

Conclusion –

While the wage gap for women still exists, it is getting smaller and smaller each year. So that’s some good news. In the meantime, it’s important to make sure you properly negotiate your salary, don’t be afraid to ask for a raise or promotion, and always work hard to better your current circumstance and let the right people know just how hard you are working because they may not always see it.

Whether a woman knows that she is not making as much as her male co-workers for the same job, or she wonders if she could be making more, if she didn’t do her research before accepting that job offer, then there’s a strong chance she isn’t pulling in what she’s actually worth.

It’s tough to be a working woman in today’s world, but as more and more women enter the workforce and become the “breadwinners” for their families, it’s important to make sure you’re making the most you can possibly make. This will help ensure that you stay out of debt and it will allow you to set up an emergency fund and plan for retirement.

If you need help getting out of debt, seek out nonprofit credit counseling through Advantage CCS. Our certified credit counselors can create a realistic budget for you, give you a game plan to get out of debt, and give you all the right tools to make sure you succeed and become debt-free as quickly as possible. Call us today at 1-866-699-2227 or visit us online at www.advantageccs.org for some free advice and help!