The pandemic changed virtually every aspect of our lives in ways both large and small – and finances are no exception, particularly for women who are more likely to take on caregiving responsibilities and already faced a significant gender wage gap before 2020.
For women, the pandemic spelled both positive and negative changes.
Although experiences varied, Emily Irwin, senior director of advice at Wells Fargo Advisors, says, “The commonality is that women have stayed nimble and been very purposeful in re-evaluating what their goals and priorities are, and they’ve been creative about how they’re going to achieve them, both now and in the future. “
Here’s a look at some of the changes women have faced when it comes to their experiences:
Many women who lost their jobs during the pandemic still have not returned…
That disparity reflects larger layoffs during the height of the pandemic among hospitality staff, child care workers and retail employees, roles that have traditionally been more likely held by women, says Isabel Barrow, director of financial planning at Edelman Financial Engines.
“Financially, while eventually there were federal and state programs to relieve some of the financial impact, there remains a lack of job security, benefits and long-term opportunities for women in these fields of work,” Barrow adds.
… But those who remained in the workforce are making more money.
Inflation and a tight job market are pushing up wages across the board. Women’s wages grew at an average 5.6% over the past three months, according to the Federal Reserve Bank of Atlanta’s wage tracker. That lags men’s 6.5%, but still represents a significant increase.
In addition to having more bargaining power over their salaries, women are also finding themselves in a better position to negotiate for more flexibility at work, says Lisa Featherngill, national director of wealth planning at Comerica Bank.
“The pandemic has opened employers’ eyes that we need to give people flexibility in a way that works for them,” she adds.
Only a third of women are confident in their retirement plan …
And about one in five women actually intended to retire later due to the pandemic, according to Nationwide Retirement Institute. Separately, the 2022 Allianz Life Retirement Risk Readiness Study found that women are less confident about being able to financially support all the things they want to do going forward in life (73% versus 88% for men) and more likely to fear running out of money than men (61% for women versus 53% for men) than death (39% versus 47% respectively).
“This level of concern isn’t a major surprise, since most events that cause significant financial disruptions tend to weigh most heavily on women – especially as it pertains to managing family finances,” says Aimee Johnson, regional vice president and retirement consultant for Allianz . “Whether that means adjusting the household budget, managing new costs associated with child care, or taking on the expense of becoming a caregiver to an elderly or sick family member – those challenges tend to fall to women in greater numbers.”
The pandemic exacerbated that trend for many families and women, she adds.
… But women are more interested in investing than they were before
More than two-thirds of women are now investing outside of their retirement accounts, up from 44% in 2018, according to Fidelity.
“The financial challenges of the pandemic created more of an awareness and urgency that we need to pay closer attention to our financial planning,” Barrow says. “In some cases, this was due to needing to fall back on an emergency fund or building debt. In other cases, it was trying to figure out what to do with extra stimulus money from reduced expenses because of not eating out, or shopping, or traveling. “
Nearly half of women say money is impacting their mental and physical health …
And 36% worry about their financial health on a daily basis, according to Ellevest. For those in that position, this an opportunity to make changes, Johnson says.
“Whether or not they experienced a significant financial impact over the last two years, women should use this experience to determine if they can weather unexpected financial storms and understand how truly prepared they are for the future,” she adds.
… But almost three-quarters are taking a more active approach to their finances.
Two-thirds of women investors are working with a financial advisor, as a means of gaining more confidence in their own investments, according to Nationwide. Working with a financial planner can help women meet their financial goals and avoid potentially falling into pre-pandemic financial habits.
“While it’s tempting to increase your standard of living and spend more as you make more, it’s even more important that you save appropriately, because you are going to want those savings later in life,” Barrow says. “Whether it is because of increased longevity or more of the financial burden falling on women, it is vital that women make their money and their financial security a priority.”