Personal finance is different for women – they earn less on average, take time out of the work force to raise children and live longer than men. According to Janine Rogan, author of a new book called The Pink Tax, women face an even bigger burden in the form of a financial system that works to keep them broke. The Pink Tax explains how women can “patriarchy-proof” their finances. It’s personal finance with an overlay of financial feminism. To find out more, I invited Ms. Rogan to do an e-mail Q&A for this newsletter. Here’s an edited version of our exchange:
Q: Janine, can you tell us a bit about your background and your work in personal finance?
A: I’ve been in the personal finance space for 12-plus years, and I’m a designated Chartered Professional Accountant (CPA). My journey started when I was in business school learning how to manage businesses’ finances without actually being taught how to manage my own finances. I spent over a decade in the corporate world as a tax specialist and now I work for myself educating and empowering women to build their wealth! My company The Wealth Building Academy offers online education for women to learn how to start investing.
Q: Can you dig into the concept of the pink tax and how it extends well beyond the higher prices that women pay for shampoo, razors and such?
A: It started as the difference between the cost of men’s and women’s products but you’re right – it’s so much more than that. It extends into almost every fibre of our society. Women are living in a system that wasn’t designed for them. We see it in everything from lower credit scores and higher mortgage interest rates [for women], to the motherhood penalty and the wealth gap. It’s all interconnected because we have a society that hasn’t addressed the bias in our financial system.
Q: How big an issue is money shame for women? By that I mean, feeling shame about how you manage money?
A: I think a lot of women have shame around their money. It could be for a lot of reasons, but one that sticks out is they are overwhelmed with how to get started. It’s important to remember, though, that women have been left out of financial conversations for hundreds of years. It wasn’t until the 1960s that women could open their own bank account without a co-signer like their father or their husband. It’s no wonder women feel shame – we have been told for so long that we don’t belong in this conversation.
Q: What financial advice do you have for young women starting careers, getting married and having children?
A: Negotiate everything, find a way to earn as much as you can and start investing as soon as possible. Becoming financially secure as a woman is incredibly important. Even if you choose to share your life with someone, unexpected things can happen. You want to make sure that you are in a position to be able to weather those events without financial impact. If you choose to spend your life with someone or have kids with them, both of you need to be really open and honest about your financial situations and what you value. A lot of divorces are caused by fights about money, and the best way to avoid that is through transparency. Lastly, that person needs to have your best interests at heart when it comes to public policy and how they vote. Looking at who we are electing to make change as a country is imperative if we want to achieve women’s economic equality.
Q: What about women who are retired and struggling with their finances because they have either lost a partner or been single throughout their lives?
A: Finding someone you can trust to help you work through some of the challenges is going to be really important. Whether that’s a financial adviser (please choose fee-only) or someone else that knows what they are doing when it comes to money and isn’t biased to sell you anything. If money is tight, I’ve seen some really interesting stories of older single women choosing to live together as “roommates.” This gives them the socialization they need while also cutting their costs.
Q: If you were coaching the financial industry to better address the needs of women, what are a few key changes you’d recommend?
A: Where to start … I think we need to be far more open about the fees being charged and how different people in the finance industry are making their money. The use of financial jargon also needs to decrease because it makes this industry unapproachable to many. I would also say that advisers need to focus on connecting and listening to women. Many women leave their adviser once their spouse dies, and this tells me they aren’t being heard. Lastly, I would suggest leading by example in the financial industry. Looking at gender parity in the top executive and C-suite positions, creating maternity leave policies that don’t economically disadvantage women, and more pay transparency in annual reports would be a great place to start.
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Rob’s personal finance reading list
Tips for affordable travel
Travel spending remains strong, even though prices for flights, hotels and restaurants can be expensive. Here’s a bunch of tips for saving money in planning a trip, and while you’re away. Worth a look even if you consider yourself a veteran frugal traveller.
TLC for your AC
Hot and humid July weather means air conditioners are getting a workout – I know ours is. Here are some tips for tuning up your air conditioner to work more effectively – and maybe cost you less to run.
The early days of the Bank of Mom and Dad
A time capsule – Toronto Life reports in 2014 about boomer parents supporting their adult children financially. To see how prevalent this kind of support is today, check out the results of a survey I did earlier this year.
When you can’t live off your income in retirement
There’s an idealized version of retirement where you save enough to live off your dividend and interest income without touching your capital. In the real world, many retirees live off a mix of income and the proceeds from selling small amounts of their retirement investments. Here are some thoughts on a concept called dollar-price averaging that can be used by retirees to guide their selling.
We want to hear from you
Are you under 40? Open to sharing your financial story? Our Globe and Mail paycheque profiles are popular with readers. They were created as a non-judgmental look at how young Canadians are saving, spending and generally managing their money. The latest one, which you can read here, looks at the life of a Toronto woman, 37, who earns $105,000. The pandemic pushed her to pay off her student loans. She has a side hustle walking dogs and loves to travel. “While I’m young I’d like to make sure that I live my life,” she says. If you’d like to share your story, please e-mail Globe editor Roma Luciw firstname.lastname@example.org
Tools, explainers, guides and charts
Best cashback credit cards for people who buy groceries at stores in the Loblaw chain.
The Money-Free Zone
The new single from the gospel-soul group Gabriels is called Glory and it’s best enjoyed in this video of a BBC performance. Love the falsetto vocals.
Ramit Sethi, author of I Will Teach You To Be Rich, talks in this video about his rules for deciding whether you can afford to buy a home. Sethi is a housing contrarian, so expect to be challenged.
Who I’m following on Twitter
David Edey, author of Executor Help – How to Settle an Estate, Pick an Executor, and Avoid Family Fights.
What I’ve been working on
- Might we see GIC rates hit 6 per cent this summer?
- Personal finance in a perma-crisis world: Thoughts on debt, saving, taxes, food and houses
- A quick guide to investing in AI with Canadian-listed ETFs
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
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- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home down payment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle