Josette Mandela is an MBA-trained author and financial wellness coach focused on teaching women basic financial skills.  Before becoming an author and coach, she consulted for several financial institutions. Though the money was good, there was little job security. She saw women struggling to make ends meet and unsure how to get ahead financially. Josette decided to leave the corporate world and help other women become empowered money managers. Here, she shares her opinion on the gender inequality in financial decision-making in households. 

Some may say an article on gender inequality in financial decision-making is so twentieth century. Others may say with all the gender fluidity in today's society this is a non-starter. However, from my experience, there is still a gender gap when it comes to financial decision-making in households.

Let us go back in time and review what led to gender inequality in financial decision-making.  

  • Men were the sole breadwinners in households
  • Women were excluded from formal education and employment opportunities
  • The legal system kept women from owning property or accessing credit without a male cosigner
  • Cultural beliefs - women should prioritize family over finances

Note that many of these challenges still exist in countries outside the United States. In the United States, the Equal Credit Opportunity Act of 1974 allowed women access to credit separate from their spouses. This meant single or married women could apply for a loan or credit card in their name and could maintain their own credit score. 

As women now had access to credit, they were able to purchase real estate, take out a loan for a major purchase, or get a credit card without having to rely on a male relative or husband as a co-signer. 

After 1974

For women born after 1974, the challenges of women not having access to credit seem like a bad movie plot. For those born before 1974, however, this was a reality that left many women destitute after the loss of a spouse. In rare cases, widows were granted the property their husbands owned but in many cases, the woman was required to find a male relative to manage her affairs. In some cases, the property was assigned to the oldest male child. The mother was then forced to ask her son for permission to do anything with the property. It seems inconceivable today, however, that was how the laws were structured up until 1974 in the United States.

Having grown up during that time I remember when my mother had an opportunity to go to an out-of-town conference. Because it was too far to drive to the conference and come home to sleep she needed to stay at a hotel. Hotels required a deposit to reserve a room and so my mother had to ask my father to fill out an application for a credit card so she could have a way to put down a deposit without having to send the hotel a check in the mail.  

As I recall they made an appointment at our local bank branch and filled out the form with the bank manager. It seems it was a few weeks later when the credit card arrived. My father was not happy about applying for the credit card. Up until then they always paid cash.  My father was afraid that a credit card would be a temptation to overspend. He couldn't understand why a business would want to take credit when getting cash assured you of being paid what you were owed. It took my dad decades to accept credit cards as a cost of doing business.

Today's Challenges

Though women have gained many opportunities since the Equal Credit Opportunity Act of 1974. The gender inequality gap still exists. Where are the challenges seen today?

  • Older women
  • Male-dominated cultures
  • Lower individual income
  • Traditional role influences

Older women, particularly those who were born before 1974, may still harbor old stereotypes. The man is the breadwinner, and the woman is the homemaker and thus does not feel comfortable talking about financial matters. They may not have had any financial education growing up, no examples of how to manage money from their parents, and always relied on a man (usually a husband) to take care of the money. 

In male-dominated cultures, the man sets the rules and the woman follows them is still alive and well. In this scenario, the woman may be complacent or not willing to rock the boat and accept that her husband will do the right thing with their finances.

For the lower individual income category, women tend to fare worse than men. Women tend to take time out of their careers to raise families and thus do not increase their income as quickly as men. 

Women face gaps in financial health relative to men. They tend to struggle to meet immediate expenses as women typically make less money than their male counterparts, even when doing the same job.  To further compound the issue they have fewer dollars to save or invest. Because of their lower income, women tend to rely on debt to make ends meet. This in turn leads to women maintaining higher debt levels and having less confidence in their future financial security.

How does all this impact women? Today there is still a culture of secrecy around managing money. It is not a skill taught in school and women feel guilt and shame about not being able to figure it out on their own. Worse, a lot of the so-called gurus make them feel stupid and pile on the guilt and shame rather than offering solutions to help them feel empowered. The net result is yet another generation of women struggling with their finances and not sure where to turn for help.

Financial Education

Consider your financial education. Did you learn the financial skills you use daily from your family? Did you take a class somewhere in your past? Learn the skills from a book? How confident are you about your financial situation and your ability to manage money?

When men are asked these questions, you find an array of answers as to where they acquired their skills. However, when you ask the question about confidence in their financial situation and ability to manage their money, they are almost unanimous in saying they know what their current financial situation is and are confident in their abilities to manage it.

A lot of women on the other hand admit to being scared of their financial situation, afraid of being a bag lady later in life because they do not feel confident of their financial situation or their ability to handle money. 

Find out more about Josette here: www.josettemandelathemoneygirl.com