While women in the United States continue to earn less than men, on average, the gender wage gap is narrower among younger workers nationally, and the gap varies across geographical areas, according to a new Pew Research study. While earnings parity tends to be greatest in the first years after entering the labor market, it widens later. In that context, learning how can women better arm themselves for asking for a raise, negotiating salary or preparing for a financial emergency? Many experts say that it mostly comes down to financial education, knowing your worth and being ready to walk away from a work situation that doesn’t work for you anymore.
On The Live Richer Podcast, Tori Dunlap – founder of Her First $100K and host of the Financial Feminist podcast – said that she that we don’t have any equality for any marginalized group until we have financial equality, and that she sees her in teaching women how to pay off debt, how to say save money, but seeing those acts as a form of protest.
“So in a society or in a system that actively does not want you to have money and actively gate keeps financial information from you, one of the most radical forms of protest is you actually becoming financially confident and becoming financially stable. And I think that idea or that movement of financial feminism is what really connected us to people,” Dunlap said.
Indeed, a new Laurel Road survey finds that women, especially women of color, feel employers can still do more to narrow the pay gap. The survey showed that 44% of women do not feel their employers have been successful in narrowing the pay gap, with 48% of BIPOC women agreeing that their company isn’t doing all it can to lessen the gender pay gap. Even more disparaging, 42% of women feel that women at their company are less financially empowered than men overall, with 49% of BIPOC women indicating they feel this way, the survey found.
According to Dunlap, when it comes to personal finance and personal finance decisions, 10% of it is your own choices, 90% of it is circumstantial. “And I think for a really long time, we didn’t have conversations around systemic oppression as it relates to personal finance. We told you, oh, well, if you want to be rich, just work really hard – not acknowledging that we live in a sexist, racist, ableist system and society,” she said.
She recommends having the same mentality as companies, which are ready to “cut you without a moment’s notice,” and not be afraid to go somewhere else if it’s no longer working for you, or if the company doesn’t give you the raise you think you deserve.
In terms of asking for a raise or negotiating a salary, she said that women should first arm themselves with data, using sites such as Glassdoor, salary.com or PayScale. And then go one step further and discuss this salary negotiation with colleagues, mentors or people you met at networking events. The second aspect, she said, is highlighting your value.
“Ways you’ve saved the company money, projects you’ve implemented, people you’ve managed, balls that were dropped that you picked up. Anything that you can show that proves that you are extremely valuable to the organization is going to help you be able to convince somebody to give you the raise,” she said.
And beyond the financial aspect of negotiating a salary or a raise, Dunlap said that it’s also extremely valuable feedback to assess whether the company is a place where you can grow.
“If you negotiate kindly, respectfully, and you present it well and they don’t respond well to that, that’s a huge red flag, where either you don’t want that job, you don’t want to work with that company or if you’re already at that company, maybe it’s time to start looking for something else,” she said.
This is also reflected in the Laurel Road survey, which found many women plan to ask for a raise in 2022 and are willing to switch jobs for the pay they feel they’ve earned. Indeed, 54% of women – and 59% of BIPOC women – stated they think they will ask for a raise in 2022, the survey notes.
That’s another reason why women should have an emergency or savings account, Dunlap said.
“This is why I tell women, this is the power of financial stability and financial education is you get to leave toxic situations you don’t want to be in anymore, whether that’s a relationship or a job. You get to donate to causes you believe in, you get to get married or not get married or have kids or not have kids or start a business or retire early. You have all of these options open up to you when you have that financial stability. And so for me, having that emergency fund meant I didn’t have to stay another day in a situation I didn’t want to be in it and exist in that toxicity anymore. And having a financial foundation and financial stability means that you don’t have to put up [with] toxicity,” she said.
In an encouraging sign, a recent Nationwide Retirement Institute’s Advisor Authority study found that women became more financially proactive during the pandemic, building long-term strategies to ensure income in retirement, protecting against outliving their savings, and taking shorter-term actions like starting rainy day funds and following a monthly budget.
The study also found that women have already demonstrated a stronger likelihood than men to make better long-term decisions when facing financial crises. For example, fewer women investors (8%) than male investors (15%) liquidated assets from qualified retirement savings plans- a smart decision given the long-term consequences that can occur when pulling money out of your retirement savings.
Dunlap said that if you do have some flexibility in your financial situation, “Even if it’s 10 bucks a month, 20 bucks a month, do everything you can to set up as many of your financial steps or financial tasks on autopilot as possible.”
“So paying your bills on autopilot. Also, setting up an automatic transfer from your checking account to your savings account to automate your savings. Again, even if it’s just 10 bucks a month, 20 bucks a month, setting aside that automatic transfer, helps you not even think about it,” she said. “It happens without you even noticing. We call it in the personal finance industry paying yourself first as opposed to leaving it to the end of the month when you’re like, oh, I don’t have anything left in my account anymore.”
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