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Women's Economic Inequality

Woman reading stocksPlanning Ahead
Related section>> Canada's Retirement Income System

From the time we enter the adult world through until our retirement, we get the message that we should be saving for our future. For many women this can be a difficult thing both to think about and to actually do. Money is an intimidating part of life and it can be especially so for women.

Here are a few reasons why we may be hesitant to think about our financial future:

  • the men in our lives have always taken care of our money
  • we feel it's outside of our control
  • we'd rather live for the moment
  • we've never had the chance to learn good money management skills
  • we've always had enough money so we assume we always will
  • we've never had enough money to have to worry about any surplus
  • money in our hands has gone for necessities such as food, clothing, and shelter while our partners (if we have them) have had control of discretionary spending
  • we're afraid of losing the money we do have by investing it unwisely
  • we'd rather think about more important things than money
Raging Grannies protest the G8The reality of women's financial situation
In recent decades the economic position of women has much improved. Access to more varied employment and progress towards equal pay for work of equal value has improved women's earnings. The Canadian and Quebec Pension Plans (CPP/QPP) and some occupational pension plans are helping provide more future security.

But when thinking about our financial future it's important for us to remember some of the persistent facts about women in Canada:
  • On average, women earn 72 cents for each dollar that a man earns.
  • Women may enter the workforce later, and leave it sooner and more often, than men.
  • Disproportionate numbers of women still work in low-skill, low-pay jobs, and in part-time or term employment.
  • Women are much less likely than men to have access to a good pension plan at their places of work.
  • Half of married women would live in poverty without their husband's income. After a divorce a woman's income drops an average of 45%.
  • Women live an average of six years longer than men. Half of single women over the age of 65 live in poverty.
  • Women often find themselves as the major caregiver to their children as well as to older people in their lives.
Although many women are experts at making money go a long way, given the context of women's economic inequality it is important for us to take time to think about our financial future.

Here are some of our suggestions for planning your financial future:

To learn about CPP/QPP, Old Age Security, and RRSPs, visit Canada's Retirement Income System.

1. Know your priorities.
Society sends out many mixed messages about what we should be doing with our money. Most of us have heard that we should be saving for our future. At the same time we are told to live life to the fullest and spend lots while we are young and can enjoy the money. Recognize that you can't have everything no matter what the ads say. Take time to figure out what you really want and then decide how to get it. If having a big house and lots of stuff is important, you will have to find a higher-paying job and probably work longer hours. If having time to relax and spend time with family is important and you're able to live more simply, then you may be able to work less.

2. Get advice.
Sometimes it's hard to talk to other people about our money, even to those who are closest to us. But money is like anything else in life, it's important for us to learn from each other and to share our experiences. Financial advisors are trained to give financial advice and can be helpful. Some are geared specifically towards women. But don't forget that you know best what's good for you. Watch for biased advice. Financial industries may earn money from the financial products they sell you - some financial advisors earn straight commission from these products rather than charge you fees. Be aware of the personal interests of the person(s) giving you advice. Ask them to state their biases and assumptions up front so you are aware of them.

3. Start early
Start saving as early as possible in life. Money will compound much more over 35 years than over 15 years. Saving early will also set you on a good path for saving throughout the rest of your life and increase your confidence that you can do it. But however old you are, it's never too late to start saving.

4. Keep out of debt
Debt can be a serious impediment to one's ability to save and can easily spiral out of control. If at all possible, keep out of debt or use debt to buy something that will increase in value such as a house. Remember that some interest rates are much higher and therefore more dangerous than others. Try to avoid the high rate charge accounts and pay them back as soon as you can.

5. Put money into RRSPs
RRSPs (Registered Retirement Savings Plans) and RRIFs (Registered Retirement Income Funds) are savings programs that are specifically designed to provide income in retirement. Their major benefit is in deferring taxes. Within certain limits, income tax is not paid on money put into an investment in your RRSP or on the earnings it generates, until assets are withdrawn. This deferral can continue for a long time, because it can run from the date you put the money in (say age 25) to the date the money is withdrawn (say age 75), a compounding period of 50 years! RRSPs are an important program available for women who may not have access to employer-based plans. More on RRSPs.

6. Get insurance
Insurance is especially important in situations where one or more family member is dependant on the income of another. For example, for women with young children who are relying on their partners' incomes while they stay home to raise their children, the death or disability of a wage-earning spouse could mean bankruptcy. Single women without children tend to have less need for insurance. When buying insurance, distinguish clearly between buying protection against loss of income (often best achieved through term insurance and sometimes by a group plan at your place of work), and paying into a savings program (often done in a whole life policy). If what you need is protection, don't put your insurance dollars into a savings plan. As retirement approaches, reduce your insurance.

7. Own your own home
If at all possible, purchase your own home. Houses are a generally a solid investment increasing in value over the years. Ideally, they will also provide you with a place to live for many years, a benefit not included in your taxable income. If you have always assumed that you could never afford to own your own home, ask about home ownership programs for low-income people available in your community. You may be eligible.

8. Start low-risk and maintain balance
If you choose to invest money you have saved, start with low-risk investments. If you can tolerate the risk, move gradually into higher-risk investments. Work towards a balanced portfolio, probably leaning heavily towards the low-risk end of the spectrum. Avoid 'flavour of the month' investing. Most good investments show their best returns over time despite monthly/annual ups and downs. Be sure there is always some money that can be accessed in case of emergencies. Reduce the risk as you age.

To hear one woman's story of planning ahead visit Gustine's story.

These guidelines were originally presented by UNPAC member Muriel Smith at UNPAC's 'Striving for Women's Economic Equality and Independence' conference in March 1997. Revised by Muriel Smith, Murray Smith, and Jennifer deGroot. Many thanks to Murray Smith for extensive feedback on this section.

Other Sources:

  • A Woman of Independent Means. Lecture. Gail Vaz-Oxlade. Winnipeg. June 18, 2002.
  • Appreciating your Worth: A Program to Help Plan your Financial Future. Trimark Investments.
  • Discovering your Money Attitudes and their Effect on your Life: a Seminar to Empower Women to Take Charge of their Financial Future and Invest in Themselves. D'Arcy Bruning-Haid, Cynthia Downs, Donna Taplin. April 13, 2002.
  • Invest in Yourself: Women Smarts for Young Women. Manitoba Women's Directorate, 2000.


  • Global Poverty Quiz

    "The power of earning is essential to the dignity of a woman, if she has not independent property."

    John Stuart Mill, 1869

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