Women contribute $7.6 trillion annually to the U.S. GDP and control the majority of purchasing power. Yet, there’s still a deficit in their financial confidence.
2020 marked the 100th anniversary of the 19th Amendment, the landmark change to the U.S. Constitution that granted women the right to vote. The amendment was the result of tireless activism by women like Elizabeth Cady Stanton, Lucretia Mott and Susan B. Anthony—names now synonymous with the women’s rights movement.
But the passage of the amendment holds more than just political importance; it was a moment that has rippled outwards over the past 100 years, allowing successive generations of women to obtain more education, fight for higher wages, accumulate greater personal wealth and move closer to equality.
Today, women earn the majority of college degrees, and have done so since the early 1980s, according to the National Center for Education. Women contribute $7.6 trillion to the U.S. GDP annually, according to various estimates, and lead the way as entrepreneurs, owning more than 9.9 million businesses in the U.S. with 8.4 million employees. Inside and outside of the household, women drive the economy, accounting for 70 to 80 percent of consumer purchasing, according to Bloomberg data.
“Women make the vast majority of the decisions about what the family is going to buy,” says Angie O’Leary, head of Wealth Planning for RBC Wealth Management–U.S., adding that baby boomer women are now in a position where they have buying influence over four, even five generations.
Women also influence how money is given. According to a survey by The Economist Intelligence Unit (EIU) commissioned by RBC Wealth Management, 81 percent of women see it as important that both their wealth plan and legacy align. “The vast majority of philanthropy is guided by women in the U.S.,” says O’Leary. And that will continue as the population ages—in most cases, women outlive men, says O’Leary, putting them in sole control of family wealth and legacy before it passes to the next generation.
Yet, despite this progress towards equality and economic power, O’Leary says there’s still a deficit in financial confidence among women.
Referencing an article in The Atlantic, O’Leary explains that when researchers looked at a man and a woman with the same education background and a similar financial literacy level, they found differing levels of financial confidence.
“There’s a huge gap between men and women,” O’Leary says.
That’s why in 2020, a milestone anniversary in women’s history, O’Leary and her team at RBC Wealth Management elected to create a tool to help women build their financial confidence and accelerate their economic progress over the next 100 years. Women and wealth: A planning workbook, seeks to help guide women through the complexities of their financial lives so they have a better handle on where they’re at and where they want to go next.
Cyndy Ranzau, a wealth strategist at RBC Wealth Management–U.S., says she suspects a lot of the issues with women’s financial confidence stem from the cultural narrative surrounding women and money. “The stereotype is women don’t know how to handle money, or women have to be taken care of by a man,” says Ranzau. “It’s reinforcing the lack of confidence.”
There’s no quick way to fix that, Ranzau says, but a good place to start is to move beyond the notion of financial literacy and start making money a more common conversation for women. “It’s not ‘we need to make women smarter’—we want to make sure that the people making the decisions have all the tools and know that they have all the tools,” she says.
Perhaps as a result of having more of those tools available, younger generations are reporting an increased financial confidence. For example, according to RBC’s The New Face of Wealth survey, 72 percent of millennial women said they are their household’s primary decision-maker for financial planning, compared to less than half of baby boomer women. What’s more, 78 percent of millennial women say they’ve had more opportunities to generate wealth than people in prior generations.
“In the U.S., we’re seeing women marrying later and building wealth on their own, and that’s native to millennials. It certainly wasn’t something that my generation went through,” says O’Leary, a baby boomer. “They have their own careers, they’ve made their own money, they have their own 401(k), and many of them are starting to buy their own homes before they’re even married.”
However, O’Leary is quick to point out that despite all the progress made since 1920, there’s still more work to be done. Work that could, in essence, make the world a more equal place.
“Think about the power of the purse, if women only purchased goods and services from companies that had women in the C-Suite or on the board, or companies that are socially responsible … voting with your dollar puts a lot of power in women’s hands,” she says.
And Ranzau agrees, adding that part of progress is letting women know how much power they actually have. “You tend to discount your voice,” she says. “But if every woman knew that 70 to 80 percent of women control the purchasing power, that could impact how decisions are made. Women are not a niche market, we’re 51 percent of the population.”
Download the Women and wealth: A planning workbook, a new resource from RBC Wealth Management.
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