Have you heard of the FIRE movement? I came across this video on Youtube the other day and must admit to becoming a little obsessed. Financial Independence, Retire Early (FIRE) practitioners combine extreme saving and smart investing to retire in their 40s, or even 30s – what a dream! Sadly, that kind of freedom is unlikely to become a reality for me, or, for that matter, many other women.
Women live longer, but because of the gender pay gap are less prepared for old age.
On average, a woman in the UK earns 21% less than her male counterpart, but is likely to live several years longer. Gender pay gaps like this exist all over the world, and increase as women age. Lower lifetime incomes mean that by the time a woman reaches retirement, she is significantly more likely to face financial hardship.
Lack of financial literacy leaves women at a further disadvantage.
Worldwide, 30% of women are financially literate compared to 35% of men. Lower financial literacy means that women are less likely to invest in the stock market while paying attention to fees, to borrow at low cost, diversify risk or accumulate retirement wealth. At a time when we can no longer rely on the government for adequate support in retirement, it is imperative that women have the knowledge and skills required to achieve financial security through other means too.
Globally, men are more likely to save money than women. In the UK, there is a 15% gap between men and women when it comes to saving for retirement.
If you know me personally, I’ve probably sent you a link to the Story of a Fuck Off Fund. While it doesn’t talk about saving for retirement, it does highlight the reasons it’s important to save in the short-term, too.
The author, Paulette Perhach, describes how easy it can be to spend more than you earn, while cautioning against it with two very persuasive examples: sexual harassment at work and domestic abuse – the latter being particularly compelling when you live in a world where 1 in 3 women has experienced physical and/or sexual intimate partner violence.
Often, when we talk about saving, we talk about it in terms of buying back our time or having control over how we spend our days – about having the freedom, for instance, to leave your job if you don’t feel fulfilled because you can afford to be unemployed for a while. As Perhach shows, though, it’s very much about personal safety too.
As feminists, we don’t just have a responsibility for ourselves, we also have a responsibility towards others.
The story of the Fuck Off Fund is about empowering yourself. But what if the person being sexually harassed at work wasn’t you, but your colleague? Only if you have financial security are you truly free to stand up and fight for them, with them, at the risk of losing your job. As an empowered feminist, you should be helping to empower others – but morals are for those who can afford them.
We can give back in other ways too, of course. But all of them require time, money, or both. If you have to work several jobs just to make ends meet, there is no way you’ll have the same time or energy to give as somebody with the privilege of financial independence. And when it comes to just sharing wealth, a little goes a long way, but the more you give, the bigger the difference you can make.
So what can we do?
Taking responsibility for your finances is like exercising. Fun for a few, a chore for many, but absolutely essential in the long run. It takes time, discipline and effort to see results, but I believe we have a responsibility to ourselves and others to put that work in.
My advice? Aim to spend less than you earn. Track all your spending, in a spreadsheet or an app, because it’ll show you where you can cut back and where you can give back. Find what works best for you and reach out for help and guidance from others if you need it. Educate yourself and others because it’s time to close that financial literacy gap once and for all.