In Part I of this post, Empowerment Coach Marsha Haygood counseled on what you can proactively do to counter the persistent gender pay gap.*
In addition to the former corporate human resources executive, we also spoke with Financial Advisor Mina Ennin Black, Founder of In the Black Financial Wellness, on wealth management.
Ennin Black started by illuminating how this pay disparity can not only affect an individual female worker’s life, but have ripple effects intergenerationally: This monetary short fall (which averages over $431,000 for white women in lifetime earnings, and even more for us) can affect your ability to finance your basic living expenses; medical care; retirement savings; children’s college tuition, and even impact one’s social security benefits—which are largely based on earnings.
Your action plan’s step one—start with the end in mind:
“Figure out what your retirement number is,” Ennin Black says, and “what you want your retirement life to be. “
Also abide by tried and true advice: “Live below your means.” Then save and invest the surplus.
However, she also distinguished some ways that Black women, in particular, may have to handle their finances differently.
“One of the things we have to do as a group is first acknowledge that we are starting from behind,” she says. “Until the system changes, there’s not a lot you can do to make up the difference. So we have to be creative.”
Here are her key insights:
- Don’t rely solely on our careers for accumulating wealth: Ennin Black is a strong advocate for multiple steams of income making up a “wealth pie,” with income being one slice, investments another, real estate—and so on.
- Avoid the syndrome of familial wealth: “We have a tendency to share our wealth with family,” she observes. “We give and give and give, even when we don’t have it to give.” However, this culture of shared—as opposed to individual—wealth is likely “impacting your bottom line in the long run.” She wisely questions, “If you end up losing your job, or you end up not having enough money, and now both [you and those you’ve been aiding] are in the same position, how is that helping you?”
Her guilt-free solution: “Make it a line item in your budget, and set aside money to help relatives.” This lets you stick to your financial goals and your budget—but have the flexibility to do “what feels right,” and help family out in emergencies.
- Master the art of making lemonade: The gender pay gap and discrimination are real, so you may have to make some hard career choices. Being underpaid, she observes, “also affects your productivity, because you become resentful towards your co-workers.”
Says Ennin Black, “If you are being underpaid, it may be time for you to switch jobs, switch companies, or figure out a way to bring in additional streams of income.”
Black shares, for a side hustle, “Most people say I don’t know what to do.” However, she encourages, “Whether you realize it or not, you have a talent.”
Making lemonade’s bright side? “Who knows,” she says, “you may be able turn that into a full-time gig.”
*“As Women Take Over a Male-Dominated Field, the Pay Drops,” by Thoka Maer, The New York Times, March 18, 2016: http://nyti.ms/1RNipaA