Men, Women and Money: How Financial Life Differs Between the Sexes

For this edition of Money Talks, we’ve got a guest piece written by Kristine Beese and Rachel Birse of Untangle Money. Kristine is the CEO and Co-founder of Untangle Money and has made it her mission to help women and individuals from other marginalized communities take control of their finances and grow their wealth. Kristine and Rachel’s piece is all about the differences men and women face in their financial lives and their research may surprise you, so we’ll let her take it away…


Women’s and men’s financial lives are different, and it’s totally overlooked, and often ignored, in a male-dominated finance industry. That is one reason why it is so important to make finance accessible to women. We need to create an environment where women feel safe, welcomed, and understood when it comes to money and their financial lives (that’s why we started Untangle Money). 

So let’s dive right in!

How do finances differ for men and women?

At Untangle Money, our research revealed that women's financial lives are significantly different than men's. The total amount of money that women earn in their lifetimes is much less than men. Because our ability to earn income is more limited, the rules of thumb used in finance don’t work for us. For example, if you read an article that says you need to save 10% for retirement, normally they are referring to a man; for a woman who earns the same amount after graduation to save the equivalent amount over her lifetime, she will need to save 18% for retirement.  

So, let’s dig into why finances differ for men and women.

Overall, women’s financial lives include far more ups and downs than men's. Let’s take a look at this graphic we prepared to help illustrate our point:

Compared to Owen, Sandra's income is more likely to fluctuate. Sandra is more likely to take sabbaticals for maternity leave and elder-care responsibilities, switch to part-time work, and get paid less for the work she does than Owen will. 

We're not saying that Owen won't do some of the things that Sandra does, but statistically Owen's financial life is more likely to be linear.

Some other reasons why they differ include:

  • Industry gap: industries that have higher representation of female employees tend to pay lower wages than industries that have higher representation of male employees.

  • The wage gap: women still get paid less for the same job (83 cents for every dollar a man earns). Even when they are in industries that are traditionally male. The Globe and Mail recently highlighted a 25% wage gap between male and female equity partners at Blake, Cassels & Graydon LLP. 

  • Thepink tax”: Women pay up to $2,135 more for stuff every year. This includes: big ticket items such as higher borrowing rates for mortgages and credit cards (despite having better credit), auto repairs and long-term care, as well as monthly items such as hair/personal care, dry-cleaning, menstrual products, and birth control

  • Paid work vs care work: women spend an average of 25% less time in the paid workforce because of caregiving responsibilities. This could include maternity leave, and/or elder-care responsibilities, often for both her and her partner’s parents. 

  • And, women's salaries peak in-and-around 40 versus men's who peak in-and-around 55 (e.g. a woman will make the most money she will ever make in her life at 40, but a man keeps making more money until 55). This means that a man will have roughly $10,000 - $20,000 more per year for 25 years, that they can dedicate towards investments. Looked at differently, men can afford to wait until they’re 40 to start saving for retirement, but women can’t. 

All of these effects (and more) lead to the wealth gap - women have only 32% of the wealth men have accumulated, that is less than a third of the wealth; and the wealth gap is even wider for women of color, who have just pennies for every dollar a white male has.

What can women do to mitigate the different financial life they will likely experience?

There are three main things a woman can do to increase the options she has in the future. 

  1. Start early - time is your biggest advantage when it comes to investing. The earlier you start investing the more time you give your money to work for you. Start today - Untangle Money can help you figure out a plan so you know you’re on the right track. 

  2. Invest more - research shows the average household needs just under $2,500 in savings - make sure you aren’t keeping your future in a bank account. Women make excellent savers, but we need to be putting more of that money to work for us.

  3. Invest in diversified portfolios that have a higher percentage of stocks (sometimes called equities) - yes there is more risk from putting your money into the stock market; however, you need to balance that risk with the risk of underfunding your retirement. We know that the longer you live, the more likely you are to end up below the poverty line. If you have a long time before you need the money, you should think about the tradeoffs between losing money now versus not having enough money to fund your retirement. 

Why is this important to talk about?

There are so many important reasons to talk about all of this:

When it comes to the pay gap: According to the AAUW, the pay gap contributes to the wealth gap because it makes it difficult for women to amass savings, build wealth and achieve economic security. This is important to talk about because it is more than just a women’s rights issue - it has lasting effects for everyone. 

Women should not be paid less for equal work; this only furthers the belief that men are better, smarter or more superior than women are, which is damaging to everyone. Women shouldn’t have to rely on their spouses for financial security or anyone for that matter. Having to rely on someone else for your financial security can lead to an imbalance of power, it can lead to forms of abuse, and it takes away your freedom. Women should be allowed to take maternity leave without worrying about how this time off (potentially with no pay or insufficient pay) will affect their career trajectory, financial future and retirement.

When it comes to the industry gap: Even when women go into typically male-dominated professional industries, the pay gap actually widens, and women earn even less than their male counterparts. 

When it comes to financial advice: Because women’s financial lives are so different, traditional financial products don't present an accurate picture of a woman's finances over her lifetime. Most women don’t realise that there is a difference, so she may not know that she needs to approach her money differently.  

When it comes to making purchases: When a woman makes big purchases like getting a mortgage, she needs to know that she will likely be charged more; to know that those rates are negotiable; and how to negotiate those prices effectively (by getting quotes from multiple banks and seeing if they can beat each other’s rate, rather than negotiating with her). 

When it comes to taking risk: We don’t advocate speculating on the price of things (meme stocks or stock tips that you pick up from friends without credentials), but we do think it’s worth having a thoughtful discussion of the risks you can afford to take while you’re young, and balancing them with the risk of underfunding your nest egg and outliving your money. Perhaps it is worth taking a little more risk now and having a better chance of reaching your financial goal, than it is to avoid risk now, and be a long way off of your target retirement amount.

When it comes to politics: Make sure that you’re looking at the gendered implications of policy decisions. A lot of the changes that need to be made are structural and institutional. Speak vocally about these things with your friends, families and local politicians. A good place to start is Invisible Women, and Shortchanged. We are also running a book club on Why Women Are Poorer than Men which you can join by sending your email address to hello@untangle.money.

What's next?

You can follow Untangle Money over on Instagram, Facebook, Pinterest, and LinkedIn to see more content about personal finances and planning for your financial future. You can also check out our other blog posts here!

Financial independence is a huge part of being a strong, independent person, and it is our mission to help women, and anyone who doesn't feel safe or welcome in financial spaces typically dominated by cis men, set themselves up for financial success.

At Untangle Money we help women understand their (real!) financial picture, and obtain financial guidance from people that actually, really, get it. We would love to help you, too! Join the community of hundreds of other women looking to strengthen their financial well-being. You can check out our “Mini” here or get in touch for a free consultation!

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