Fearless 3.21.22: Addressing financial barriers for women

Good morning and happy Monday! Spring is *officially* in the air. This is Emily Barske taking over the newsletter for Emily Kestel this week as she wraps up her spring break. (Loyal Fearless readers know her love for taking in the little moments, especially sunrises and sunsets — check out this gorgeous photo she captured in Colorado!)

This week we're featuring a story from Emily Kestel talking to advisers about how we can address barriers to financial success for women. We're also continuing to celebrate Women's History Month.

— Emily Barske, editor of the Business Record

Despite controlling a sizable chunk of the wealth in the United States and often serving as primary financial decision-makers in households, women face many systemic and personal barriers when it comes to financial empowerment.

For starters, there’s a knowledge and confidence gap when it comes to financial education in women.

Then you factor in the gender pay gap. Recent analysis from the Institute for Women’s Policy Research shows that when looking at median weekly earnings, Hispanic women earn 59%, Black women earn 64%, white women earn 80% and Asian women earn 95% of white, non-Hispanic men’s earnings. In Iowa, women on average earn 76 cents for every dollar a man earns.

Then you realize that women hold two-thirds of U.S. student loan debt and take longer to repay it than their male counterparts in part due to the aforementioned pay gap.

And if that’s not enough, you remember the notion of the motherhood penalty, where those who choose to have children often see pay cuts during a time of peak earning age.

All of the above means it’s all the more important for women to educate themselves on their personal finances.

We reached out to several women who work as wealth and financial advisers to hear their perspectives and gather tips. Here’s who submitted responses:

Lisa Ung, a licensed agent and owner of Ung Financial Services in Des Moines.

Heidi Parkhurst, a wealth adviser with Merill Lynch Wealth Management in the Quad Cities and the president of Bank America Iowa. She was featured as one of the best women wealth advisers in the state by Forbes.

Kristen Mott, an associate wealth adviser at Private Wealth Asset Management in West Des Moines.

Responses have been edited and condensed for clarity.

Why should women care about their finances?

Ung (pictured): Statistically, women tend to live longer than our spouses. We are our parents' caregivers and the "go-to" person when the issue arises. We need to learn how to budget, prioritize, save for our retirement, protect ourselves and our families. Without understanding our financial situation, we may be setting ourselves up for failure.

Parkhurst: Financial independence is a fundamental step in establishing long-term professional and personal success. A solid financial footing is essential for women of all backgrounds and circumstances; whether their goals include saving for college, establishing the credentials to purchase a first home, or supporting a family. Women will be better prepared for their future and equipped to face challenges if they have a greater understanding of finances and access to resources that will allow them to generate wealth.

Mott: Every person, woman or man, young or old, should intimately care about their finances because they matter more to you than anyone else. While not the only variable, your finances will very likely have a direct impact on your ability to accomplish many of your goals and dreams.

What barriers or challenges do women face in terms of financial health or wealth management?

Parkhurst (pictured): Often, women take on many important roles in family life. Caregiving is certainly no exception, where the majority of family caregivers are women and are 49 years of age, on average. This may include caring for children, an aging parent or any number of factors that lead to women taking on additional responsibilities to support others. Of course, such responsibilities can not only be a sacrifice of time, but also money. An unforeseen medical expense from a loved one, fees associated with children's education, or any other countless scenarios can lead to financial obligations that may hinder personal financial goals. While some of these situations are unavoidable, it’s important to remember that keeping a steady financial routine benefits the family as a whole.

Ung: There seems to be this misconception that men should be the money holder in the family – as if when it comes to money, we are not as smart as the men or as savvy as them. As an Asian-American woman working in the financial industry, it seems like people are comfortable coming to me to get health insurance advice, but when it's financial advice, they prefer to go to a man. I can't tell if it's because I am a woman or because I am Asian. But I think it's the perception that men know more.

Mott: It is so essential for a woman to be able to voice not only what is important to her, but also her concerns and worries. Trusted financial advisers come with diverse backgrounds, strengths, areas of expertise and characteristics. If a woman ever feels as though she is not being heard or seen, I would strongly recommend finding an adviser that is a better fit. Understand that, like any relationship, it does take time to build rapport and trust, but it is so critical to be able to convey what is most important in order to get customized and relevant advice and support.

How can parents or caregivers teach others about financial literacy (and what’s the importance of doing so?)

Mott (pictured): It is important to begin teaching financial literacy at an early age. Unfortunately, our education system does not give finance the emphasis it deserves. I have seen so many instances where young adults are sent off to college, or begin their careers, and do not have a solid base knowledge about how to manage their money. As one could imagine, without the proper foundation and education, this can lead to detrimental impacts on an individual’s credit scores and financial future. Financial literacy can be taught via many different methods. My recommendation to parents or caregivers is to get those you are teaching directly involved as much as possible. To really grasp the pertinent skills and attention required, money management needs to be hands-on. Help set those individuals up with a checking and/or savings account and a debit card to give them firsthand experience to fully grasp the importance. Start slow, with smaller dollar amounts and lower limits, to teach the importance of tracking, budgeting and recordkeeping. Also, consider starting accounts with a responsible joint account holder to help monitor and provide regular oversight and support. Gradually move toward individually owned accounts once a solid foundation is built and responsibility is proven. Also deserving of time, explanation and coaching is the importance of building a strong, cohesive credit history. An individual’s credit score can propel or quickly halt financial transactions in the future and is so essential for financial success.

Ung: My family immigrated here from Laos. At the beginning, they both worked very hard. But as time goes by and they are comfortable with their job, I see that they rely on future paychecks and spend what they have. So they end up living paycheck-to-paycheck, with no savings. I see this and think, "Oh maybe that's the lifestyle." When I got married and started a family, I quickly learned that's not how it's supposed to be. Things will arise and anything can happen at any given time. When you don't have savings, you can easily go down the rabbit hole of being broke. We started teaching our kids at a very young age that you have to work hard for your money and need to save 50% of what you earn. Never spend more than what you have and never rely on your next paycheck. I use my personal experiences a lot when I am teaching my kids, because I want them to know how important it is to save early.

Parkhurst: Thankfully, there is a bounty of helpful resources out there to help establish better financial literacy right here in our Iowa business community. For example, Bank of America’s Better Money Habits platform offers free customizable content and tools to break down financial topics in ways that are approachable and easy to understand. It’s an investment of time that can truly make a difference for a better financial future.

What’s one thing women can do right now to improve the health of their finances?

Ung: Financial education. Understand what's coming in and going out in their household. Understand how to read statements, what interest means, how money works, etc. Don't put your money in the hands of others. Sometimes it takes many hands to make it work and to save for retirement. Like they say, don't put all your eggs in one basket.

Parkhurst: While it may sound trivial, setting a budget can be a great first step in improving the health of personal finances. By taking the time to identify key priorities and tailoring a budget accordingly, women can become more conscious of how they are spending money. Other steps may include calculating net worth, tracking spending and planning for saving for longer-term priorities. Even something as simple as setting a "spending cap" for each week can be a strategy for building wealth.

Mott: To improve the health of their finances, women should dedicate time and effort to this critically important subject matter. While often not interesting or even comfortable for many, like so many other vital components to one’s success, this is an area that requires time and attention to be successful.

When I was growing up, I had a "working mother." That is what women who worked outside the home were called in the ’60s and ’70s. For a mom to have a career was not the norm, and women in the workplace faced significant adversity and discrimination. Even more unusual was the fact that my best friend’s mom was something called a board director. We didn’t even know what that meant, but she wore suits to meetings and talked about the economy and we knew she was a big deal.

Whether they knew it or not, our mothers were pioneers for gender equity and role models for my friends and me just as their mothers and others had been for them.

Flash forward to 2022. Over the years, women have made tremendous advances in the workplace and in the boardroom, thanks to women who paved the way as well as men who helped to change culture and championed the status of women. While we still have far to go to achieve gender equality, during Women’s History Month it is especially important to highlight the positive changes that have occurred.

Here are 10 ways women are advancing in the workplace and in the boardroom:

1. In the last five years, women in the U.S. have advanced at every leadership level in the workplace, according to McKinsey & Co.’s Women in the Workplace 2021 study. That includes women in director, vice president, senior vice president and C-suite roles. However, women of color are not advancing at the same rate, and have C-suite representation of only 4% compared with 20% for white women.

2. Despite the stresses of the pandemic, women are doing more to support teams and advance diversity, equity and inclusivity than their male counterparts, says the same McKinsey study, adding that women leaders with traditionally marginalized identities are twice as likely to focus on DEI over and above their formal responsibilities. Unfortunately, the report indicates that these efforts are not always recognized or valued.

3. The multiplier effect is working; when there is one woman in the C-suite, there is a correlation of three women in senior management roles, says the Deloitte Within Reach 2021 study. Despite this effect, only 8.2% of Fortune 500 CEOs are women, according to the 2021 Women CEOs in America Report.

4. The wage gap is narrowing for younger women. According to the Pew Research Center, women ages 25-34 earned 93 cents for every dollar a male in the same demographic earned, higher than the still significant 84-cent level for women overall.

5. 100% of S&P 500 boards now have female board representation of at least one woman, compared with 91% 10 years ago, reports Spencer Stuart’s 2021 Board Index.

Deidre DeJear, the likely Democratic candidate for Iowa governor, filed her nominating signatures March 15 at the Iowa Capitol, becoming the first Black woman in Iowa’s history to be the Democratic or Republican candidate for governor. Gov. Kim Reynolds announced her bid for reelection a week earlier.
The University of Iowa’s Caitlin Clark was named a first-team All-American and Iowa State’s Ashley Joens was named a second-team All-American.
Katalin Novák has been elected as Hungary’s first female president by the country’s parliament. She previously served as deputy chair of Prime Minister Viktor Orbán’s right-wing Fidesz party and was family affairs minister in charge of his economic support agenda for the middle class, including subsidies for housing, state-backed home loans and tax cuts.
Equal Pay Day in the U.S. landed on March 15, the earliest the occasion has ever been marked. This means on average, women "only" had to work 74 extra days into 2022 to catch up to what men earned in 2021. But data shows that those who get the worst end of the wage-gap stick are women of color, who are disproportionately represented in minimum-wage and low-wage jobs. (We recently published an interactive story looking at restaurant and bar wages in Iowa.)
European Union states have given initial approval to pushing firms to appoint women to at least 40% of non-executive director roles or 33% of all board jobs by 2027, the latest attempt to advance a draft law that has been stalled for a decade.
President Joe Biden marked the long-stalled reauthorization of the Violence Against Women Act with an event at the White House on March 16, celebrating its passage and underscoring that more still needs to be done to combat domestic violence.
The latest It’s a Man’s (Celluloid) World report from San Diego State University’s Center for the Study of Women in Television and Film has found that men outnumbered women onscreen by a factor of 2 to 1 in 2021. This proportion held steady across the shares of lone protagonists (31%), major characters (35%) and all speaking characters (34%), with less than 3 points of deviation from the year before.
The Iowa House has passed a bill that would nullify many city and county ordinances that critics say prevent Iowans from having successful home-based businesses.

Wells Fargo on March 10 announced new resources designed to help increase the growth of female-owned small businesses, including a $1.5 million grant to How Women Lead. The San Francisco-based banking company said the initiative is "aimed at disrupting the unequal venture capital system for women founders." Wells Fargo said the grant is meant to seed a $1 billion fund to inspire 10,000 women to invest with venture capital for the first time. Additionally, Wells Fargo is sharing new data and an interactive toolkit on closing the economic gaps facing female entrepreneurs. According to the Center for Venture Research, only 5% of accredited female investors have access to invest in VC funds, even though women control 50% of wealth today. "Supporting women and women in business has always been a huge priority at Wells Fargo and this month we are underscoring our year-round commitment," said Mary Mack, CEO of Wells Fargo Consumer and Small Business Banking. "If we come together on actionable steps to close the gender equity gap, we can accelerate the trajectory of women entrepreneurs and their contributions to the economy." How Women Lead, led by founder and CEO Julie Castro Abrams, has a national network of 14,000 senior executives, according to its website.

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