Welcome to our #125 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on research about why women who are married or in a couple tend to save less than men (and also women and men who are single).
We’ve created a brief list of things you can do today to change that.
And don’t forget, you can (re) listen to The Purse Podcast interview with Heather McGregor and Barbara Huson where we talk about how to shift your relationship with money and grow your net worth.
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And you can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
Why being in a couple can leave you with less savings (and what you can do about it)
What can women do to challenge gender norms when married or in a couple?
In the UK, the gender wealth gap is £15bn.
Many recognise the ‘motherhood penalty’, the gender pay gap and child gap as major contributing factors. But what is less known is that women tend to have less ambitious personal savings goals when married or in a couple. For women and men who are single, there is no gender difference in personal savings goals, as reported by The Converation.
Wait. Why?
Based on recent research, gender norms influence attitudes towards saving.
Women are often tasked with managing the household budget and are therefore more likely to focus on short-term financial goals.
Perhaps the anticipation of adverse events affecting their daily budget means that women (in a couple) choose modest personal savings goals and accessible financial products. For example, women prefer to put their money in a cash ISA vs a stocks and shares ISA.
In contrast, men in couples tend to focus on long-term financial goals and choose financial products designed for long-term savings habits. For example, self-invested personal pensions provide more control over what you invest and when.
Men are often assigned long-term investing tasks and this encourages them to focus on long-term wealth growth and set more ambitious personal savings goals.
These findings are only intensified in more traditional households where the man is the breadwinner.
Context is key
Therefore exploring the context within which financial decisions are made is vital.
It is important for women (and men) to recognise how gender norms impact financial decision making and actively plan to address this.
Women are still socialised to believe ‘they are not good with money’. And that their male partner will know more about money and how to invest it.
This perpetuates the stereotype and importantly, it does not allow women to develop the skills they need in order to grow their long-term wealth.
Women often prioritise the needs of their family, children or their partner ahead of their own, which comes at a considerable financial cost: their net worth.
Very often women are time-poor as they shoulder the burden of household chores and childcare leaving limited time or headspace to focus on growing their long-term wealth.
This becomes a virtuous circle which is difficult to break. And women’s long-term (and short-term) financial security is compromised.
As 50% of marriages end in divorce and relationships can end, women are exposed to far greater financial risk throughout their lifetime than men, and especially as they get closer to retirement.
So what can women do? Here is a list to get you started…
First of all, become aware that gender norms are likely to impact your net worth or your long-term wealth building (more than you realise). Learn about these gender norms.
Commit to your personal long-term wealth building.
Make sure you understand the long-term investing decisions your partner has made and continues to make. Get involved (if not already).
How much are you spending vs saving (& investing per week/month).
Calculate your net worth ie how much you own vs how much you owe. For example: find out how much you have in your pension vs how much (credit card) debt do you have? (Be clear on what this is for your partner & as a couple and for you personally).
Talk to a financial councillor or find a financial adviser who can help you. Establish your financial goals based on what you want to achieve (financially). Ensure your personal savings goals are ambitious so you can start to invest more of your money on a weekly/monthly basis.
Identify what (spending) habits need to change. How much time do you need to dedicate to learning about money & investing a week/month. And allocate time to review money & investing finances with your partner on a regular basis.
What next?
News in Brief
Financial news
The US Federal Reserve has already stopped the shrinking of the balance sheet. Fed balance sheet now equal to 36.5%+ of US's GDP vs #ECB's 81.9% and BoJ's 135%.
European Central Bank raises interest rates for first time in 11 years. Bank surprises markets with 0.5 percentage point rise as inflation reaches 8.6% in eurozone.
Bank of England governor says half-point interest rate rise ‘on table’. Historic tightening may be needed to return UK’s 40-year high inflation rate to central bank’s 2% target.
UK inflation hits fresh 40-year high of 9.4% and ‘could hit 12% in October’. The prospect of inflation hitting 12% this autumn is looming larger after dearer fuel and food pushed the official measure of the cost of living to a fresh 40-year high.
Crypto: bitcoin, ethereum, DeFi & NFTs
Digital assets have added nearly 16% to their collective capitaliation since last Friday, representing approximately $143bn in nominal value.
Major cryptocurrencies gained on Friday with ether (ETH) breaking the $1,600 level amid a run-up in broader equity markets in Asia and Europe.
Ether dominance rises as altcoins outperform bitcoin. Ether now makes up 18.7% of all cryptocurrencies, its highest point since May. Bitcoin dominance fell slightly, from 43.5% to 43.1%.
Bitcoin short-seller profits jump by 50% in June amid meltdown. Short sellers target GBTC, BITO amid rout for cryptocurrencies. ETF tracking the inverse of Bitcoin futures has seen inflows.
Tesla sold about 75% of its bitcoin to add $936m to balance sheet. Bloomberg Intelligence said July 15 that the quarterly results could include a bitcoin-related charge of about $740m.
Coffee Break? Read This
Male ‘biological clock’ can affect chances of birth more than was thought, study finds
In praise of loud women – the joy and power of being noisy and female.
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial adviser.
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