Money Management

The gender pay gap has created an even bigger gender wealth gap — but women are fighting back with smart money moves and big investment gains. See how! [[{“value”:”

According to the Bloomberg Billionaires Index, as of March 23, 2024, the world’s top 15 wealthiest people are men. But even aside from the rarified realm of the richest people on Earth, in everyday financial life, women are less likely to be investors. Women tend to have lower incomes and less wealth than men.

The gender pay gap is an unfortunate part of everyday life for half the population; as of 2020, women in the U.S. were earning about $0.83 for every dollar earned by men. But along with the gender pay gap, women face certain disadvantages in their lives as investors who are trying to save for retirement and build wealth for the future. The gender pay gap and other inequalities in the American workplace, and how Americans save and invest, can drive an even bigger long-term gender wealth gap for women.

Let’s look at a few high-level stats on the gender investing gap, and how women today (and the organizations that employ women) can make progress on helping women (and our world) get wealthier for the future.

1. Gender wealth gap: Women have 32% of men’s wealth

Research data cited by the American Association of University Women (AAUW) found that women have about 32% of the wealth that men have. When women are underpaid compared to men, they are naturally going to have a harder time saving money and building wealth for the future. The gender pay gap has led to a larger gender wealth gap.

2. Gender wealth gap by race and ethnicity: Single moms have lower wealth

The gender wealth gap is even more severe if you look at a breakdown of stats for households headed by white women and women of color. Research cited by the Federal Reserve Bank of St. Louis found that:

Families headed by women have $0.55 of median wealth for every dollar of wealth held by white male-headed households.Families headed by Hispanic women had $0.10 of wealth for every dollar of wealth for white male-headed householdsFamilies headed by Black women had $0.05 of wealth for every dollar of wealth for white male-headed households

Some communities within the U.S. have faced historic discrimination, barriers, and exclusion from higher education, homeownership, and high-paying careers. When you add the potential costs of raising children and the burdens of being discriminated against based on gender, it’s easy to see why many women, especially single mothers of color, are less likely to build significant amounts of wealth — no matter how good they are at budgeting.

3. Single moms are more likely to be unbanked than to be CEOs

About 1 in 10 (10.4%) of Fortune 500 CEOs are women; 15.9% of single mothers are unbanked.

This one stat tells us a lot about how women are underrepresented in the C-suite and all too likely to be living in financial precariousness. Unfortunately, single mothers today are much more likely to be unbanked — existing outside of the protections of the banking system and vulnerable to high fees and predatory loans — than to be high-paid CEOs.

4. Women have 70% of the retirement income that men have

All those years of working for lower wages due to the gender pay gap also add up to women having less money saved for retirement, less money paid into Social Security, and a lower standard of living in retirement. Data from the American Association of University Women (AAUW) found several big gender retirement savings gaps:

Women receive about $0.70 for every dollar of retirement income that men receiveWomen get about 80% of what men collect from Social Security benefitsWomen get about 76% of men’s pension income

If the gender pay gap is $0.83 per dollar, the retirement income gap is even worse at about $0.70 for women compared to every dollar a man gets in retirement.

5. Women’s retirement savings accounts are 44% lower than men’s

A Vanguard survey in 2021 found that the typical woman’s retirement account balance was $31,291, which was 44% lower than men’s median balance of $45,106. The gender pay gap is not the only culprit here; women are also less likely to have jobs that qualify for a 401(k) plan or other non-Social Security retirement account. For example, U.S. Department of Labor statistics show that women are more likely to have part-time jobs that don’t have employer-based retirement plans.

6. More women are investing in stocks

According to a study from Fidelity, as of 2023, 60% of women were investing in the stock market. This is up from historic averages of only 40% of women. More women buying stocks is good news for women’s future retirement incomes.

7. Women get better investment results than men do

In a world where so many Wall Street CEOs and personal finance gurus are men, you might be (pleasantly) surprised to learn that women are often better investors than men are. Studies show that women get 0.4% to 1% higher average annual investment returns than men do. This could be because women tend to be more risk-conscious than men. Women are less likely to invest too aggressively, overreact to short-term downturns in the stock market, or chase the latest hot investment trends.

Bottom line

There is good news about the gender investing gap: Women are making it better. In spite of historic inequalities and disadvantages, many women are working, saving, and investing in ways that can close the gap. When more women can buy stocks, build wealth, and invest for the future, that ultimately makes the economy better for everyone.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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Older shoppers may want to consider joining Sam’s Club to save money when shopping. Find out how seniors can benefit from having a Sam’s Club membership. [[{“value”:”

Warehouse clubs are becoming increasingly popular as shoppers seek ways to reduce spending. The cost of groceries and everyday essentials have increased, so getting a deal by purchasing goods in bulk can feel like a win. But you’ll need to get a membership to shop at Costco or Sam’s Club.

Even seniors can benefit from a Sam’s Club membership. Here are a few reasons senior shoppers may want to consider adding a Sam’s Club card to their wallets.

1. Save on prescription drug costs

All Sam’s Club members can benefit from discounted prescription drug prices. Generic medications start at $4, and discounts are also available on brand-name drugs.

While you can’t combine health insurance or discount cards with Sam’s Club prescription savings, some senior shoppers may find they can keep more money in their checking accounts by filling their prescriptions at their local Sam’s Club pharmacy. If you’re curious if you can save by becoming a member, contact your local club to learn more about prescription drug pricing.

2. Stretch your fixed income further

Another reason older shoppers may benefit from a Sam’s Club membership is it can help them stretch their money further when purchasing groceries and household goods.

Many seniors live on fixed incomes, so they must be cautious to stay on budget when shopping. If you have the room to store bulk items and live near a Sam’s Club, the annual membership fee may be worth it because of the savings you can get by shopping here.

3. Spend less on travel

Retirees can save money on travel costs with their Sam’s Club perks. If you’re spending your retirement years traveling the country or abroad, a membership could help you stretch your vacation budget further. You can use your membership perks to save on hotels, rental cars, attractions, amusement parks, and more.

4. Get a deal on health expenses

Sam’s Club members can also save money on important health expenses. They can schedule free hearing tests at their local clubs and shop for hearing aid devices and accessories. Seniors can also use their Sam’s Club membership perks to get a discount on prescription glasses and frames. A Sam’s Club membership card is handy if you’re a senior who wants to save on healthcare expenses like this.

5. Save time and money with prepared meals

Sam’s Club sells prepared meals at a great price. While these dishes are sold in family-style portions, this could benefit many seniors. Instead of spending time cooking multiple meals a week, these meals can be used as a convenient meal-prep solution.

You can buy one or two meals for the week and portion them out for multiple meals. Doing this may help you save money on food costs and cut down on the time you spend cooking.

Consider your needs and shopping habits before joining

If you’re a senior trying to decide whether to invest in a Sam’s Club membership, consider your needs and shopping habits first. If you have a club nearby and room in your home to store bulk items and other essentials, joining may be worthwhile.

Before joining, make sure you can afford the $50 to $110 annual membership. Unfortunately, Sam’s Club doesn’t offer memberships at a discount for seniors. However, the warehouse club frequently runs membership specials for new members. So look for a deal before you join to avoid overpaying. For additional tips, check out our personal finance resources.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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High-yield savings accounts make it easier to save in college and put teens ahead of the curve. Find out how to do college savings the right way. [[{“value”:”

Eighteen and broke. When you’ve got little to save, it makes sense to knock “opening a savings account” way down the priority list. But there are unexpected benefits to opening high-yield savings accounts early, even when you’re a college-bound teen with $0 in the bank.

A high-yield savings account (HYSA) offers better rates than typical savings accounts. It’s great for savers with lots of money in the bank.

But for teenagers, the goal isn’t saving up gobs and gobs of cash. (Not yet, anyway.) It’s about long-term benefits: making it easier to save in college, making the best bank your first bank, and getting ahead of the learning curve.

HYSAs make it easier to save in college

High-yield savings accounts help you organize expenses and avoid fees.

Many students stick to college checking accounts. Problem is, that’s only half of the banking puzzle. Checking accounts make it easy to spend, but they don’t make it easy to save. HYSAs do. For example, I keep my tax money in my savings account so I’m not tempted to spend it. It works.

HYSAs sometimes help you avoid fees. Many of the highest-yielding accounts are offered by online banks, which charge fewer fees because they’re cheaper to operate. In college, my brick-and-mortar bank charged me minimum balance fees for underfunding my savings account.

Skip the fees by opening a HYSA that doesn’t charge minimum balance fees. Some do, but many don’t. Also keep an eye out for maintenance fees, which can eat into college savings.

HYSAs graduate with students

HYSAs become even more relevant when students graduate.

A high-yield savings account offers higher-than-average interest rates. When you graduate college and begin saving in earnest, a good APY matters. It’s the difference between earning $5 and $50 per year on a $1,000 deposit.

That brick-and-mortar bank I mentioned earlier, the one I used in college? I grew out of it. Fast. The fees were ridiculous, and it ended up costing me hundreds of dollars. Plus, my APY was abysmal — less than 1%.

I’ve switched to banking apps that pay me 10 times as much as I earned back then. Teens who choose a HYSA from the start can avoid the hassle of switching banks later on.

I wish I’d started with an online bank instead, one that offered a competitive HYSA. I’d have saved the time and effort I spent switching over all my bills and integrations to another bank. (I actually ended up switching banks twice, but you can do better than I did!)

HYSAs help students learn finance fast

HYSAs help college-bound teens learn about finance with little effort, putting them ahead of chumps like me, a guy who didn’t know what an APY was until years after I graduated.

Compound interest has to be seen to be believed. It’s one thing to hear that the more money you have, the faster it grows. It’s another to watch your savings account grow. Get curious: plug your rate into a compound-interest calculator over 40 years, and feel your jaw hit the floor.

Long-term savings habits take time to build. Amounts are less important than long-term results. A college-bound teen who deposits $50 per month into a savings account with a 4% interest rate for four years would graduate with about $2,600 banked. That’s over twice the typical American’s savings account balance. It may be enough to make a good habit stick around.

Should teens open HYSAs?

High-yield savings accounts aren’t the cure-all for financial woes. It won’t kill you to not have one, and cash-strapped teens won’t make much money on deposits anyway. However, opening a HYSA early could make life a bit easier for college students.

These savings accounts are FDIC insured and could earn you 11x your bank

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Raising kids ain’t cheap. Learn how shopping at Costco could help you save on an array of different expenses. [[{“value”:”

In case you haven’t noticed, raising kids is expensive. In fact, depending on the rate of inflation, you could be spending roughly $300,000 to raise a child to age 17, according to research assembled by The Motley Fool Ascent.

Regardless of how much it costs exactly, most parents know how it feels on their personal finances. Of course, there are ways to cut back on your spending, such as joining Costco. A basic annual membership costs $60, but that money could easily be earned back in savings. While Costco can save you money in many areas of your finances, here are five reasons parents should consider joining.

1. Baby supplies

For newborns, Costco can help you save on diapers, wipes, baby clothes, formula, diaper rash cream, and other baby necessities. In fact, its diaper costs are so cheap, even its sale price of the popular brand Huggies is cheaper than other retailers.

And this is for a name brand, too, which isn’t the cheapest diaper you could buy at Costco. If you opted for the lowest price, you could buy the Kirkland Signature diapers, which cost $34.99 online for 192, or roughly $0.18 per diaper. That unit price is super hard to beat, no matter where you shop.

Other Kirkland baby necessities are also cheaper by the unit-price, though you might want to comparison shop for larger items, like baby monitors and car seats. Although you can find decent prices at Costco, you might find these items on discount at other retailers, like Target or Walmart.

2. Clothes

Costco’s clothing section is one of its greatest underappreciated savings perks. True, it’s not as aesthetically pleasing as the arrangement of mannequins and styles at more popular clothing stores (truth be told, it kinda resembles a garage sale with its flat tables and piles of clothing). But when you’re looking for kids’ clothes, this section can be a treasure trove of attire.

And you’ll find great deals on name-brand items in addition to brands you never heard of. For example, Costco currently sells a PUMA kids’ three-piece fleece set (hooded jacket, shirt, and joggers) for $14.99. Walmart sells a similar PUMA three-piece set for $24.99 — a full $10 more!

3. Quick meals

Most parents know that when their kids play a sport or engage in extracurricular activities, the sport or activity becomes theirs, too. Whether it’s taking kids to play softball every Saturday or driving across the state for a band competition, parents’ lives can get hectic, leaving less time for other important things, like meal preparation.

If that rings true for you, Costco can make things easy by providing you with an ample supply of easy-fix meals, like hot dogs, hamburgers, sandwich meats, macaroni, and other easy options. Costco can be especially useful if you or your spouse frequently invite your kids’ teams (or even a group of friends) over for practice, as you can buy in bulk and feed many more mouths at a lower price.

4. Snacks

Much like having quick meals on hand, Costco also makes it easy (and cheap) to have plenty of snacks in the cupboard. One of my favorite Costco items, in fact, is its variety snack box. This box comes with 51 different snacks, ranging from nuts to trail mix, and costs about $0.65 per snack pouch. If you’d rather have something healthy, Costco also sells a 65-piece Healthy Snack Box, which includes granola bars, dried cranberries, and low-calorie snacks, for $44.99.

5. Buying in bulk saves time

And trust me — saving time is almost as valuable as saving money. Having an ample reserve of snacks, meals, diapers, wipes, trash bags, paper towels, toilet paper, and other necessities will keep you from driving the kids to the grocery store each week and hoping they behave. While you still have to drive the kids to Costco — which can be hectic — you could still cut your trips down (and maybe entice kids to behave with a trip to the food court).

Truth be told, Costco can help you save on your kid-related expenses. It might even be worth upgrading to an Executive membership to get 2% back on all your purchases. At the very least, it could help you earn back the price of the membership ($120), thus making your Costco membership free.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

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Having a lower income doesn’t mean you can’t build a solid nest egg. Read on to learn more. [[{“value”:”

Seniors who are forced to retire on Social Security alone often experience their share of financial stress. To avoid that later in life, it’s important to do what you can to build a solid nest egg. But that’s easier said than done when you don’t earn a very high income.

The good news, though, is that there are strategies you can employ as a low-income worker to boost your retirement savings. Here are three to consider using.

1. Snag your full employer 401(k) match

Vanguard reports that 95% of employer retirement plans come with some sort of matching contribution. Find out what your company’s 401(k) match entails, and then do your best to contribute enough money to your account to claim it in full. Not only can that money add to your balance, but you can also invest your employer contribution to grow that sum over time.

Let’s say you’re able to snag a $2,000 employer match this year. If you invest that money over the next 30 years and score an average annual 10% return, which is in line with the stock market’s long-term average, you’ll end up growing that $2,000 into almost $35,000.

2. Automate contributions to an IRA

If you don’t have access to a 401(k) plan through your job, worry not. As long as you have earned income, you qualify to make contributions to an individual retirement account (IRA).

Now, the nice thing about 401(k)s is that contributions are deducted from workers’ paychecks, so it’s easier to stay on track as a lower earner. But many IRAs allow you to set up automatic contributions from your checking account. So if you commit to automating even a small transfer each month, over time, it could add up to a lot of savings.

Let’s say you only manage to contribute $25 a month to your IRA. Well, if you do that over 40 years and your investments in that account generate an average annual 10% return, you’ll end up with about $133,000 in retirement savings. And that assumes you never increase your savings rate, which you may be able to do as your income increases.

Northwestern Mutual says that the average saver in their 60s has a nest egg worth $112,500 today. So if you were to end up with $133,000, you’d have more than the typical near- or current retiree today.

3. Take advantage of the Saver’s Credit

The Saver’s Credit is a tax break designed to make it easier for lower earners to save for retirement. For the 2023 tax year, you’re eligible for the Saver’s Credit if your adjusted gross income (AGI) does not exceed:

$73,000 for a married couple filing jointly$54,750 for a head of household$36,500 for a single tax-filer

Meanwhile, depending on your AGI, you can claim 10%, 20%, or 50% of your first $2,000 in retirement plan contributions. So your actual savings will amount to up to $200, $400, or $1,000, depending on the credit you qualify for. And to be clear, the credit applies to contributions to a traditional or Roth IRA or 401(k).

It’s definitely not easy to set money aside for retirement when your paycheck is barely large enough to cover your near-term expenses. But if you employ these strategies, you may find that you can bring a lot more money with you into retirement than expected.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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