‘It seems radical to build something for women specifically, but we need to realize that most other products have been built by men for men,’ says Margot De Broglie, co-founder of Your Juno, a financial education app for women and non-binary people.
Margot and her sister Alexia have just completed a $2.2 million seed funding round for their app, an incredible achievement, especially considering just 2.2% of venture capital funding went to female-led technology companies in 2021.
Your Juno is one of many female-focused financial platforms – along with Ellevest, The Financial Diet, Her First $100K, Vestpod, Female Invest and more – to have emerged in the past few years. They're all part of a burgeoning ‘financial feminism’ trend – a movement that aims to bridge the gender wealth gap by educating and encouraging women. But is empowering people to take control of their finances enough?
‘If you look at social media and Instagram, the types of accounts that are targeted towards women tend to be more about frugality, saving and coupons, and the ones targeted towards men tend to be more aggressive – about crypto and performance and achievements,’ adds Margot, who launched Your Juno partly to address the gender bias in money conversations.
And this discrepancy goes beyond just social media. Starling Bank worked with researchers at Brunel University to analyze more than 600 photographs used in articles about money and finance as part of its #MakeMoneyEqual campaign. The research found that men were shown as being in control and making financial decisions, while women were typically shown clutching piggy banks and counting pennies. The analysis even showed that 90% of articles on money written for women were about saving and budgeting, while 73% of articles targeted at men are about making large investments.
Knowledge vs representation
As it turns out, gender representation in finance has real consequences on how women think about money. A survey experiment by the Global Financial Literacy Excellence Center shows that women are less financially literate than men, with one-third of this gap due to lack of confidence. In its research, women were more likely to answer ‘I don't know’ to questions measuring financial knowledge, but when this option was removed, they often chose the correct answer.
What this tells us is that women know more about finance than they think – they're simply told otherwise. And, not only that, but women are good with money. Even though women are less likely to invest, female investors consistently outperform men. If women invested at the same rate as men, there would be at least an extra $3.22 trillion of assets under management from private individuals, according to research by investment bank BNY Mellon. The study also found that women are more likely to make investments that have positive social and environmental impacts.
Encouraging women to participate in money conversations is a necessary first step, but it's not enough to create economic gender parity. ‘We're taking a step forward when we educate women about their personal finance management, but it's just a step,’ says Nina Mohanty, co-founder of Bloom Money, a fintech company that provides fair financial services to migrants and refugees. ‘This, in a vacuum, won't close the gender wealth gap. Why? Because there are systemic barriers to overcome.’
And there are a lot of barriers, because women have to navigate a blatantly discriminatory and predatory economic system. For starters, women earn less than men and tend to stop getting raises a decade earlier – if they even get them to begin with. Plus, women have more student loans, are denied mortgages more frequently and are charged higher rates on them when granted, they pay more for housing investments (with lower returns) and even receive lower-quality financial advice. You get the picture: the playing field is all but level, and it has a compounding effect on women's long-term financial health.
Problems with empowerment
Despite these very real and very large institutional barriers, many messages women receive about financial empowerment shift the responsibility of the systemic challenges that they face onto women themselves. It's as though financial feminism lures you in with the promise of societal change when, at its core, it pushes for personal responsibility.
‘Focusing on individual women earning quite a lot of money may be aspirational in a very consumerist sense, but it's the exact opposite of what actually allows women to prosper as a group,’ says Chelsea Fagan, co-founder and CEO of online money platform The Financial Diet.
‘We want women to have the financial tools to live a life that's dignified, and allow them to do things like having children or retire without being financially precarious or entirely dependent on a man. However, making more women millionaires has almost nothing to do with feminism and isn't a form of empowerment. So, I think insinuating that this is how women's issues can be resolved is very naive.’
Chelsea and Nina both explain that systemic issues need systemic changes, such as legislating paid parental leave (which still doesn't exist in the US), childcare support, a culture of flexible working and more generous paid sick leave policies.
‘There are systemic issues, like lack of affordable childcare, that have a long-term negative impact on women returning to the workplace if they choose to have children. The wage gap, coupled with caregiving responsibilities, also affects prime pension-earning years,’ adds Nina.
In the UK, the cost of childcare now tops the average cost of a mortgage, and research conducted by NOW: Pensions shows that average pension wealth for single mothers (who make up 90% of single-parent households) has dropped by 40% since the start of the pandemic. More than half of single mothers are ineligible for a workplace pension, which means they miss out on employer contributions and tax relief from the government that make it possible to save for retirement. Later in life, women often have to step out of the workforce to care for sick parents, or because their employers fail to support them through menopause.
The rise of financial feminism may have brought awareness to these issues, and advocating for financial literacy (for any gender) is a worthy cause, but that alone can't replace policy change or government aid. We need to build a financial system that doesn't actively discriminate against women and, unfortunately, no amount of platitudes or budgeting advice will make that happen.
Words by Olivia Cassano