4 Innovative Ways Women Can Supplement Their Paychecks and Grow Wealth in 2024
Women who wonder when they’ll finally reach parity with men in financial matters have seen progress in recent years, but it’s slow going. During the 2023 fourth quarter, the median weekly earnings for women amounted to 83.8% of the median earnings for men, according to the U.S. Bureau of Labor Statistics. That represented a slight improvement from 82.9% the previous year.
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Pay inequities don’t stop in retirement. The average Social Security check for women is more than $350 less per month than for men. Women also have much less saved up in 401(k)s and other retirement plans, according to research from T. Rowe Price.
There are many barriers women still face when it comes to building financial security. In addition to the gender pay gap, these include the “motherhood penalty.” According to a new report from MarketWatch Guides, this penalty refers to a decline in wages after giving birth and taking time off to care for children. Another barrier is that single women tend to have lower credit scores and more negative factors in their credit history compared to single men.
For women who want to overcome these barriers, here are four steps to take to build more wealth in 2024, according to MarketWatch.
Plot Out Your Financial Goals
This step begins with assessing your values and long-term goals, according to Dr. Jenny Olson, an assistant professor of marketing at Indiana University’s Kelley School of Business. If you’re in a relationship, you should also talk with your partner to ensure your goals are aligned.
In terms of plotting out goals, the process should include determining how to achieve them and then regularly revisiting them. As Olsen told MarketWatch, goals might include enjoying luxurious vacations in retirement, financing a grandchild’s education or donating to important causes. If you need more income to achieve your goals, consider taking a part-time job or side gig to supplement your paycheck and build more retirement savings.
Take Financial Education Courses
Research conducted by Dr. Olivia S. Mitchell, a professor of insurance/risk management and business economics/policy at the Wharton School of the University of Pennsylvania, found significant gaps between women and men in terms of financial literacy.
“This lack of financial literacy then translates into greater financial regret among older women,” Mitchell told MarketWatch.
The best way to overcome this challenge is to further your financial education by taking courses, reading books, networking with others and consulting with professional financial advisors.
Get in the Habit of Investing
According to a survey from Fidelity Investments cited by MarketWatch, only two-thirds (67%) of women were investing outside of retirement as of 2021, while only one-third felt confident in their investment decisions. Less than half (47%) would know what steps to take if they had $25,000 to invest in the stock market.
Experts recommend getting into the habit of investing by beginning with low-risk assets such as high-yield savings accounts or certificates of deposit. After that, you can take the next step by putting small amounts of money into mutual funds or exchange-traded funds until you build enough confidence to start buying individual stocks.
Consider How Long You’ll Live
Women face “longevity risk,” which is the risk of outliving their money, and that’s especially concerning for women who are financially dependent on another individual, Mitchell said. Women in this position should ensure that they have access to money in the event they find themselves alone and without support.
“This could mean a separate bank account, prenup, safe deposit, box, life insurance [or] joint ownership of assets,” Mitchell said.
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