Hey, guys.

It's Chelsea from The Financial Diet. And this week's video is brought to you by Squarespace.

And today, I wanted to talk about the specific costs of being a woman in America. And I think it's important to talk about, because while it's true that women have made huge progress in terms of financial, professional, and personal equality over the past few decades, there are still tons of areas where our gender impacts us, especially financially. And I wanted to explore a few of the areas in which we are seriously still paying for our womanhood.

If you're a woman, it might be nice to know that on some of these fronts, it's not all in your head. And if you're not a woman, it might be useful for you to understand what we're dealing with. The first and one of the most striking areas in which we are financially, and in this case, professionally punished for our womanhood is the impact of parenthood on mothers versus fathers.

So something that people may not know is that for women and men, the impacts of becoming a parent are very different. Financially speaking, becoming a mother is one of the worst decisions a woman can make, whereas for men, becoming a father actually increases their earning potential over their life. Women are effectively punished at workplaces for becoming a parent, where men are rewarded.

These differences persist even after controlling for factors like the hours people work, the types of job they choose, and the salaries of their spouses. So the disparity is not because mothers actually become less productive employees and fathers work harder when they become parents, but because employers expect them to. Yet, much of the pay gap seems to arise from old fashioned notions about parenthood.

According to Michelle Budig, a sociology professor at the University of Massachusetts Amherst, employers read fathers as more stable and committed to their work. They have a family to provide for, so they're less likely to be flaky. That is the opposite of how parenthood by women is interpreted by employers.

The conventional story is they work less and are more distractable on the job. And this disparity actually only gets worse the lower income the family is. But part of this phenomenon across the board is that we still have very gendered notions about who should take on the majority of child rearing.

And the truth is, that expectation that mothers should be the one who are doing most of the parenting even when the decision to have a child was often 50/50 is borne out in reality. Fathers have become more involved over the decades, but there's still a huge disparity in who takes the burden of having a kid at home. It is true that today's fathers are more involved in parenting children than ever before.

Over the past half century, fathers in America nearly tripled their childcare time from 2.5 hours per week in 1965 to seven hours per week in 2011. But over this period, women's parenting time, too, has increased from 10 hours per week in 1965 to 14 hours per week in 2011. Women generally dedicate more of their free time to parenting activities proportionally.

And it's not hard to reason that it's because fathers are simply less present in the home. And when that's being echoed by our employers' expectations, it can be really hard to break out of that natural cycle of who does what. Point being, becoming a parent still doesn't mean that all the same thing for a man and a woman, especially financially.

Another area in which it really costs us to be a woman is in reproductive health. So there are two pretty fundamental realities in this dynamic at play. One, the burden still usually falls on women in a heterosexual relationship for reproductive health.

Think things like birth control pills, patches, IUDs, et cetera. Women's birth control methods are higher on average than men's. And that means that a woman on the pill from ages 18 to 65 could spend as much as $28,200 on the pill alone in her lifetime.

Contrarily, a man using one condom a day-- which, let's be honest, is probably a lot more than average-- between 18 and 65 would only spend as much as $17,155 on condoms. And despite the fact that, reproductively speaking, it takes two to tango, and therefore, both parties should be responsible for the potential downsides of preventing that reproduction, men are simply not seen as expected to endure the same things women are to prevent reproduction. Clinical studies for male birth control have been repeatedly shut down for side effects, side effects like mood change, depression, and pain, which are routinely experienced by women who take birth control.

And even when it comes to our day-to-day reproductive maintenance, our necessities are still viewed by society as a luxury. And that means we often end up paying a premium on things that are critical for our well-being. For example, as of May 2018, 36 states are still taxing tampons as a luxury item.

And I don't know about you, ladies, but I have never found anything luxurious about tampons. And similarly to this tampon as luxury item phenomenon, we have what is called the pink tax. You may have already heard of this phenomenon, but essentially, the pink tax is when products which are otherwise almost indistinguishable but marketed to women are more expensive simply because of their gendering.

And if it sounds like something that wouldn't really happen because it goes against market common sense, you would be surprised how common it is. In late 2015, the New York City Department of Consumer Affairs published a study comparing nearly 800 products from more than 90 brands looking for price differences in items marketed to different genders. On average, products for women or girls cost 7% more than comparable products for men and boys.

USAToday.com. The pink tax can be seen in everything from clothing, to children's toys, to hygiene products, to everything in between. And it's ironic when we're taxed this way considering how much we are the deciders of consumer markets.

Women influence $7 trillion of spending in the US annually and influence 83% of all consumer spending in the United States. But our decision-making is actually part of the reason that companies implement this pink tax. Simply put, companies put more resources behind products and campaigns that are targeted to women.

Therefore, they justify these products needing to be more expensive to recoup that loss. And often-- and this is no surprise to women-- these campaigns are intentionally emotionally manipulative, making promises around a woman's romantic or personal life or intentionally cultivating a feeling of insecurity. What should we do here?

Simply put, whenever it's possible, avoid products that are pink taxed. And that can often just take the few seconds necessary to cross check the price when compared to a man's product. You won't be able to avoid 100% of the pink tax, but you can start to seriously vote with your wallet by teaching companies who engage in this practice on really blatant levels that you won't support it.

Also, yelling at brands on social media is always a good option. Perhaps one of the most impactful costs of being a woman is our serious financial literacy gap. Essentially, the financial literacy gap is the gap between men and women on what we know around the basics of finance and the basics of managing our own financial lives.

There have been numerous studies performed on the financial literacy gap, and some of the results are pretty striking. In one study, results showed that both millennial and older women underperformed men in answering basic financial questions. The study also found that women are more likely to register don't know answers to these questions.

On average, between 25% and 36% of the time, women admit that they don't know the answer to a basic question. And this is a gap that is closing with each subsequent generation, but it's still pretty big. The difference in knowledge levels between millennial women and millennial men as measured on the quiz is smaller-- just 10%-- than in these older generations.

The gap between Gen X women and Gen X-Men is 18%. And for boomer women and boomer men, it's 19%. And this is good news for closing the financial literacy gap.

But 10% is still enormous. And when you consider all of the manifestations of not knowing basic things about finances, it's very likely that that 10% difference will result in enormous financial consequences over the scope of a lifetime, because not having financial literacy isn't just about every individual one-to-one decision. It's also about all of the opportunities you don't seize because you don't know that they're there or you don't understand them.

The financial literacy gap is responsible for all kinds of discrepancies in our financial lives, because it impacts everything from our wages, to our investments, to our day-to-day spending decisions. And simply put, a big reason for this is that many women are still raised in households where the expectation is that the man will be doing most of the major financial deciding. And therefore, she just doesn't need to know as much.

But there are many tangible ways to combat this. And one of the biggest ways you can is to commit yourself to learning the basics of financial literacy, which you can notably do with the TFD book. But you can also organize financial meet-ups, money talk parties, and even group chats about money with your girlfriends.

You can even go so far as to speak to your mother about what she may not know. The point is, it's up to you to decide to close that financial literacy gap in your own life and the lives of the women around you. And it's no surprise that the financial literacy gap brings us to perhaps the most well-known impact of womanhood on our finances, which is the wage gap.

So the wage gap has narrowed somewhat since the 1980s, but it's still very present, and that narrowing has slowed in the past 15 years with men still out-earning women for the same jobs. In 2017, women earned 82% of what men earned, according to a Pew Research Center analysis of median hourly earnings of both full- and part-time workers in the United States. Based on this estimate, it would take an extra 47 days of work for women to earn what men did in 2017.

And let me be clear-- low earnings are a problem for both men and women. But generally speaking, women are much more expected to be able to live on wages that fall below the poverty level. More than eight times as many women as men work in jobs with sub-poverty level wages.

And perhaps one of the most important nuances here is that although on average, women earn about 82% of what a man does, this statistic has serious variation depending on what race or ethnicity you are as a woman. Compared to white male earnings, white women earn 81.9%, black women, 67.7%, Hispanic women, 62.1%, and Asian women, 93%. The wage gap is a complicated issue with many driving factors.

But one of the things that can't be denied is that it's reflective of a lot of broader issues in our workplace. And the fact that the racial disparities are so stark is a good indicator that the answer isn't just about men versus women. But that is a good place to start, especially when looking at a lot of our preconceived notions and habits when it comes to the workplace.

Lastly, one of the toughest areas for women financially is our reduced financial access. So women are often expected to pay more for many of the same services. Yet, thanks to many factors such as leaving the workforce to care for children or earning lower wages in general than men, women on average carry much more debt than men.

In fact, women carry on average 30% more debt than men, despite having slightly higher credit scores on average. A lot of millennial women may find themselves getting married or having children, maybe taking a break from the workforce, especially as they get into their mid- to late-30s. So then therefore, they don't have that income to pay back those loans.

One of the big takeaways here, as well as in all of the areas where we experience financial disparity, is that our societal expectations about who women are and what they should be doing, and wanting, and knowing seriously impact women overall, even if it's not true for them. For example, our employers will assume that we're less focused on work and want to spend more time with our children, even if it's our husband who wants that. We're assumed not to need financial literacy, so we receive less of it, even if we want to take control of our own money.

We are seeing as more expected to take the burden of mutual choices, whether it's having a child or, in the case of reproductive health, not having a child. We're expected to pay more for products just because of our gender. These expectations can be killer.

And they can subtly influence what our actual wants and desires are. In the long run, we will all be better off if we live in a world where people are judged on who they are as a person, not with a ton of preconceived notions about what their gender means about them. And hopefully for women in the process, that will mean saving a lot of money.

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Whether you're an aspiring entrepreneur, musician, artist, or designer, make your next move by visiting Squarespace.com and use the code FINANCIALDIET for 10% off your first order. So as always, guys, thank you for watching. And don't forget to hit the Subscribe button and to come back every Tuesday, Thursday, and Friday for new and awesome videos.

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