Category: Finance

Women and the Wealth Gap

Posted on August 4, 2020 by Anna Benetollo

The wage gap between men and women has been what seems to be a never-ending fight for equal pay, with women earning about 76¢ to a man’s dollar, and minorities earning even less. A problem that has not received the same recognition – but is equally damaging in the fight for equality – is the wealth gap, in which women invest only 32¢ for every dollar invested by men. I sat down with DeLynn Zell, CEO of Bridgeworth Financial, and Alice Womack, Associate Managing Director in Private Banking at Oakworth Capital Bank, to talk about the differences between the wealth and wage gap and how they are affecting women in business.

Why do you think the wealth gap is less talked about than the wage gap?

DeLynn:

People have not been focused on the wealth gap because it tends to be a stereotypical subject. Some women are uncomfortable talking about wealth and some women tend to be better at saving than investing. In the older generations, most women would depend on their husbands to control their investing, but in recent years, I have seen that women have shown more interest in investing and have had to step up to take on a more active role with their finances. Women are inheriting a tremendous amount of money and the wealth gap will be closing. I don’t know why it is not talked about because it should be. In the next 10 years, I see that women are going to be controlling the majority of the wealth in this country.

Alice:

They are both important. The wealth gap encompasses the wage gap, it encompasses a lot of things including confidence in investing, risk tolerance, and career gaps. Women tend to have more gaps in their career because they are usually the caregiver of the family regardless of income. The less time women spend working, coupled with the wage gap while they are working, means less money to be put aside for investing. The ability to take on more risk and the confidence in doing so, will reduce the wealth gap. The wealth gap is a broader subject.

How has the wealth gap affected your performance and desire to climb the corporate ladder?

DeLynn:

Early on in my career, we were on commission. However, I later learned that 2 of the guys that started when I did were being given a stipend for a year and I was not. The head of the firm didn’t think women could make it in our field but thought that by giving me a shot, he was doing me a favor. That only made me work harder to prove myself. Now, I’m fortunate enough to say that things worked out in the end.

Alice:

I took time off to be with my children and fully exited the workplace for two years. When I did go back, I spent several years in a part-time role. If I had to do it all again, I would make the same decision today, but it does affect your ability to save for retirement. Not only did I not have income to contribute to my retirement plan, I missed out on the benefit of my employer match of my personal contribution. Investing early on is critical to growing your wealth, and the caregiving years for children are typically fairly early.

How in your workplace do you try to combat the wealth gap among employees and clients?

DeLynn:

As a female, I am sensitive to that and have made sure that wages are based on job description and performance. Nothing is based on gender. I’ve heard older people in the past make comments like “He’s got a wife and kids at home, he should make more than a woman who is the second breadwinner in her family.” While that is something that has gone away quickly with the younger generations, I am afraid we still have some of that attitude.

Alice:

From a client perspective, education and awareness are important. I think women are starting to feel more and more comfortable talking about finances. It is encouraging to see more advisors and financial institutions incorporate programs and make efforts to equip and educate women financially. When advising couples, we make a concerted effort to hear both spouses. Often during financial planning sessions, there is a spouse that is more comfortable talking for the couple. We are mindful to draw out the other individual to ensure that their voice is equally heard as they may have never given thought to options presented to them until they learn what is available. Research has shown that women are very comfortable with saving and bill paying, but far less comfortable than their male counterparts when it comes to investing. Our role is to encourage them to learn more about and be responsible for their individual financial health.

Do you feel like the glass ceiling is still intact or have we broken through?

DeLynn:

I think in many industries it has been broken, but there are some where it still exists. I do think it’s generational as well. I see a difference in attitude between the 30-40 year olds and 50-60 year olds I work with. The younger generation is more progressive and has grown up seeing women at work while the older generations might not be used to seeing women in the workplace. We are seeing tremendous strides as the younger generations take control. While it may not be completely broken through, there are more shatters in it than there has ever been.

Alice:

The statistics are trending positively. There are more women in the workforce now than ever before. About half of the labor force for females are also in executive management and professional roles. However, women continue to lag pretty substantially behind men in leadership roles that include C-Suite and top management positions, political offices and Board seats.

How do you think corporate America should continue to work towards closing the wealth gap?

DeLynn:

I think there has to be mindful attention paid to ensuring that compensation has no reflection of gender. When I was in college, it was not uncommon to see women in accounting, but I didn’t see too many in finance. I have heard it said that men seem to talk to their daughters about saving while they talk to their sons about investing. A lot has changed, but we need to make sure we are educating and encouraging women to focus on wealth accumulation.

Alice:

We need to make it less of a social stigma for men to take on those caregiving roles for children and parents. Employers have to encourage men to know that it’s okay to take the time off either short or long term if it makes financial sense and encourage balance for a family. I have also witnessed the reluctance of employers to hire or promote women due to their expectation that they will leave the workplace even if that is not in their plans to do so. Hopefully over time there will be more cultural acceptance and encouraging workplace policies for those scenarios.

Financial education among women also continues to be very important as they control more and more of the wealth in the U.S. Women tend to live longer, outliving their spouse, and need additional resources to do so. Unfortunately, fifty percent of marriages end in divorce. It is critical that women understand and take responsibility for their financial health.

Decoding the CARES Act

Posted on April 29, 2020 by April Benetollo

Many small businesses are under extreme financial pressure as a result of the shelter in place order across the state. Though many of those restrictions are easing, the economic restart will be slow. Alabama Gov. Kay Ivey’s order to lift some restrictions still includes a “safer at home” message for employers. Restaurants are still restricted to deliver and curb-side service, and salons, barber shops, entertainment venues, and health clubs must remain closed.

Congress passed additional funding to the Corona Virus Relief and Economic Security (CARES) Act this week. There are temporary provisions within the CARES Act that could positively impact cash on hand and reduce taxable income, specifically deferral of employer SS taxes and expansion of losses. These are in addition to the loans and enhanced unemployment benefits available to small businesses. The Act is cumbersome to comb through, so here’s a resource to help make sense of it from your friends at Morgan Stanley.

Women & philanthropy

Posted on August 9, 2017 by momentum

As we previously discussed, women’s financial influence has increased radically due to greater financial independence, more spending power, and growing leadership. Combine increased financial influence with an upward trajectory of women’s roles in philanthropy, and there could be some serious world changing going on.

A brief history of women and philanthropy

According to Inside Philanthropy, Andrea Pactor, Associate Director of the Women’s Philanthropy Institute, traces the momentum for women and philanthropy back to 1991. In that year, Sondra Shaw-Hardy and Martha Taylor started the National Network for Women as Philanthropists, which changed the way women approached giving and cultivated women donors.

In 2004, the program became part of Indiana University, which allowed Shaw-Hardy and Taylor to make presentations about gender and philanthropy across the country. The program provided donor education to women donors about their power and influence in philanthropy, while also guiding fundraisers to engage women as donors.

This is just one example of the growing movement of women in philanthropy.

Generation and gender statistics

As the Baby Boomer generation moves towards retirement, Millennial women are modernizing giving. According to a recent study, Millennial women support a wider range of causes and are more likely to use new forms of giving, such as crowdfunding or giving circles. 75% of Millennial women said they are more likely to lead with their hearts than their heads when it comes to giving, compared to 62% of Baby Boomer women. However, Baby Boomer women tend to be more strategic and therefore more satisfied with their philanthropy.

Compared to men, 64% of women are motivated by their heart when it comes to giving decisions, compared to 53% of men. However, men tend to be more confident about which tax strategies or methods to use for giving compared to women (52% to 40%, respectively).

Philanthropic education is more important than ever. A strength of women’s philanthropy movement is its multi-faceted support of various causes. By pairing greater financial independence with philanthropic motives, women have an opportunity to make a huge difference in their communities. As women, we must come together and leverage these resources to maximize their potential.

Visit Momentum’s new Mission Partners page to learn about some great organizations that are investing in the Birmingham community and get involved!

Influence and Power Through Spending

Posted on July 18, 2017 by momentum

Women control over $20 trillion in world-wide spending.
That’s a lot of buying power.

Catalyst defines buying power as the total personal income that is available after taxes, for spending on virtually everything. Women hold tremendous power in the world economy, because they drive consumer spending. In fact, women account for 85% of consumer purchases.

Here are a few reasons why:

As education advances and marriage delays, there are more women earning their own paychecks than ever. Global incomes of women are estimated to reach $18 trillion by 2018.
Even if a woman doesn’t earn a paycheck, she is still likely the gatekeeper to her household’s expenditures.
Women have a multiplier effect. As primary caregivers for children and the elderly, women often buy on behalf of other household members.

So, what does this mean?

First of all, companies should need to understand how to tailor marketing messages to women. Bridget Brennan, an expert on women’s spending patterns, says companies should study women as you would a foreign market. Female culture has its own language, behaviors, and perceptions. The solution is not to make your product pink, like Dell attempted to do a few years ago:

“Consider Dell’s short-lived effort to market laptops specifically to women. The company fell into the classic “make it pink” mind-set with the May 2009 launch of its Della website. The site emphasized colors, computer accessories, and tips for counting calories and finding recipes. It created an uproar among women, who described it as “slick but disconcerting” and “condescending.” –Harvard Business Review

Dell corrected its error quickly, but the error shows the vast misunderstanding that often comes with marketing to women.

Companies should also work intentionally to stop promoting false female stereotypes. Consistently portraying women as eye-candy, exasperated moms, and helpless damsels in distress does nothing to make today’s women want to buy your products. Making sure to have gender-diversity throughout the company will help combat poor decisions regarding the female consumer.

. As women continue to break down traditional barriers, their influence is more powerful than ever. It’s time for companies to address the needs of their largest, and perhaps most overlooked customers: women.

Interested in learning more about female spending power? Check out the article in the Harvard Business Review that inspired this post.

Financial Independence

Posted on July 4, 2017 by momentum

In the spirit of independence and the 4th of July, we want to share some thoughts about financial independence. Last week, the Momentum blog posted on money and fearlessness. The post challenged traditional stereotypes regarding finances, particularly a woman’s tendency to rely on a man as the “breadwinner.”

Financial independence is increasingly important for women. Data suggests that 9 out of 10 women will be solely in charge of their finances at some point in their life.

Not only do women have a longer life expectancy than men, but they are expected to work fewer years in the workforce while being paid less than men. Yikes.

Consider these statistics on American women from The Simple Dollar:

According to the Organization for Economic Cooperation and Development (OECD),
women possess a lower level of financial knowledge than men.
In another study by Financial Finesse, a survey found that 65% of women have control of their cash flow (as opposed to 83% of men), 45% of women have an emergency fund (64% for men), and 48% of women pay their credit card balances in full (70% for men).
87% of American elderly in poverty are women.

The site goes on to present a guide to achieving financial independence:

Understand your cash flow.
Determine your goals and set a budget.
Eradicate debt.
Save!
Protect yourself.

For further tips, here is a great Ted Talk about financial literacy delivered by Alexa von Tobel.

However, perhaps the most important tip falls back on this idea of fearlessness. Don’t be afraid to seek financial advice, negotiate your salary, or overstep cultural gender roles. Seek out financial knowledge to better understand what you do not know. Take care of you. Financial independence will never occur without the discipline, humility, and drive required to change.

The principles are simple. The results will change your future.

Facetime with Jenifer Kimbrough

Posted on June 27, 2017 by April Benetollo

One of the greatest things about Momentum is the powerful alumnae network. Periodically we interview these amazing women about their experience in our program.

Jenifer Goforth Kimbrough serves as Chief Financial Officer at Oakworth Capital Bank. She has over 20 years of financial services experience which includes serving banking, broker/dealer and insurance clients with Ernst & Young, serving as the director of investor relations at Regions Financial Corporation, and serving on the Board of Directors and as chair of the Audit Committee for a publicly traded property/casualty insurance company. Jenifer graduated from the University of Alabama in 1993 with a Bachelor of Science in Commerce and Business Administration, receiving her CPA certificate soon after.

Additionally, Jenifer has served as the national president of the American Woman’s Society of CPAs and on the AICPA’s Women’s Initiatives Executive Committee. She has served in numerous community volunteer leadership positions including on the Boards of the Junior League of Birmingham, the Mountain Brook PTO Council, and the Ranger PTO. She teaches Sunday School at Canterbury United Methodist Church and is active with her alma mater, currently serving on The University of Alabama’s Accounting Advisory Board and as a Culverhouse Connections mentor for young women in accounting. Jenifer completed Momentum’s executive leadership program as part of Class Four in 2006.

What did you gain from your MOMENTUM experience?

More than anything, Momentum gave me a fantastic network of friends and leaders. That includes members of my own Momentum class as well as other Momentum alumnae. When you learn that someone that you’ve never met before is a Momentum alumna, there is an instant connection and familiarity between the two of you – I love that! I also learned to breathe…we have to take time to reflect and recharge.

What is one piece of leadership advice you have been given that has helped you in your career?

Years ago I worked for a partner at Ernst & Young who I respected immensely, and who counseled me to “paddle your own canoe.” Don’t worry about anybody else, what opportunities or accolades or financial benefit they may have been given that you weren’t. Just worry about you and doing the absolute best you can do every day and in every situation. The rest will take care of itself.

What challenges do you think the next generation of women leaders face?

The next generation of women leaders will face a lot of the same challenges we face today! That said, they will need to figure out what success really means to them (as opposed to someone else’s definition) and then how to go about making it happen. The pace of change today, driven mainly by technology, is incredible. It will require more vision and creativity than ever before to play within a new and ever-changing set of rules in order to stay in front of that change as opposed to trying to fit an existing product or service or idea into a much different paradigm.

If you knew then what you know now, what would you tell your 18 year old self?

I would say so much! Here are a few things: One, to learn as much as I could about what people do and how they do it by asking lots of questions. Two, to take that knowledge and recognize that I have the opportunity to create my own unique reality over time. Three, to really appreciate that every human being has something unique and special to offer no matter what package they come wrapped in.

What three words do you think should characterize every leader?

Integrity, Empathy, Visionary

How do you find balance in your career, home, and community life?

For me, the pursuit of career, home, community balance starts with the big picture of knowing what is really important to me in all of the aspects of my life. From there I make sure all decisions, big and small, are consistent with those priorities.

Is there a book that has been helpful to you in your career? If so, please share the title and author.

The book I always seem to come back to is Stephen Covey’s Seven Habits of Highly Successful People. It’s a simple, common sense approach that applies to every endeavor.

Is there anything else you would like to share? Advice you would like to give women in leadership?

Things I’ve been taught from those I was fortunate enough to be “brought along” by….

do your best to be your authentic self as you lead
remind yourself what it’s like to be led
make sure you’d be willing to do anything you ask someone else to do
always have someone (or “someones”) you’re bringing along behind you

On money and fearlessness

Posted on June 20, 2017 by momentum

Kayleigh is a college junior and marketing intern at Momentum.

Last night, I read the chapter “Fearless About Money” from Arianna Huffington’s book, On Becoming Fearless… In Love, Work, and Life.

I was intrigued by this quote:

“Even today, a surprising number of us (women) still think that it’s the man’s job to make and understand money. Far too often we delegate this responsibility and don’t learn enough about money- so of course we fear it. That’s where we have to start. We can never be fearless about money until we demystify it and take charge of it.”

Arianna Huffington just might be right. I believe my apprehension about money stems from my lack of understanding it. As a college student, I have only dipped my toe in the vast pool of finances. I have quickly come to realize that being an adult is expensive. As a female, I have always been encouraged to marry a “breadwinner.” The principle isn’t inherently bad, but what if I don’t? What if I stay single? Or marry someone with fewer career aspirations? What if I’m widowed or go through a divorce? These are all common scenarios, and all would require the means to provide for myself regardless of circumstance.

If I’m not careful, fear can creep in and alter my perspective on money. Money has tremendous power as it is viewed as a sense of security and the ultimate measure of success. If allowed, money can put reigns on people’s lives by binding them to safety instead of pursuing a life of passion. However, as Mellody Hobson once said, “angst won’t be satiated by the size of your bank account.”

So, where’s the balance?

Arianna Huffington says the balance is here: “We need to put money into proper perspective in our lives, stop avoiding it, learn about it, and stop making it more important than it is.”

As women, I believe the best thing we can do is strive for financial independence, harness the spending power available to us, and, perhaps most importantly, give back. True fearlessness about money will only come from living a life driven by purpose, not financial security.

New Study Suggests Equal Pay Next Century

Posted on April 25, 2017 by April Benetollo

Kayleigh is a college sophomore and marketing intern at Momentum.

In January, Momentum’s April Benetollo wrote a post entitled “Who Can Wait for 2085?” The article focused on the study that projected women to achieve parity in leadership in this country in the year 2085.

A new study from the AAUW suggests that women may not achieve pay equity with men until the year 2152. Yes, middle of the next century.

“According to the U.S. Census Bureau, the earnings ratio hasn’t had significant annual change since 2007. The gap has narrowed since the 1970s, due largely to women’s progress in education and workforce participation and to men’s wages rising at a slower rate. Still, the pay gap does not appear likely to go away on its own. At the rate of change between 1960 and 2015, women are expected to reach pay equity with men in 2059. But even that slow progress has stalled in recent years. If change continues at the slower rate seen since 2001, women will not reach pay equity with men until 2152.”

-The Simple Truth about the Gender Pay Gap, Spring 2017 Edition, AAUW

An early career woman faces the daunting reality of the gender pay gap, especially as she makes career path decisions that affect her long-term salary. Some of the gender pay gap stems from the motherhood penalty, which we will discuss at a later time, but this Forbes article has two suggestions for eliminating the gender pay gap: implementing pay transparency and eliminating negotiation.

The idea about implementing pay transparency is establishing unbiased meritocracy within an organization. It would raise awareness among employees, which has been the consistent weapon of choice to combat gender bias. It’s not that organizations are outwardly opposed to equal gender rights, rather organizations are unaware of how their actions affect the gender pay gap. Underlying biases are not always recognizable. Implementing pay transparency could eliminate the issue, forcing organizations to be honest about how employees are rewarded for their work.

Men negotiate salary and benefits 4 times more than women, but when women negotiate, they are likely to earn $1 million more over their lifetime than women who refuse to negotiate. It’s easy to accept a salary lower than market-value during the early career stages, but employees who do are likely to continue being underpaid for the duration of their time with that company. If eliminating negotiation is not an option, then women must find their voice and exude enough confidence to negotiate, even when they may be a minority in the workplace.

The difference between pay equity in 2059 and 2152 is vast. As an early career woman, 2059 means I will see pay equity in my lifetime. 2152 means that my grandchildren will. Entering the workforce with awareness of these issues and the confidence to fight for them will make all the difference.

Myth-Busters About Equal Pay

Posted on April 5, 2017 by April Benetollo

April Benetollo, Dir. Marketing & Development, Momentum

Bring up the topic of equal pay, and you’re likely to be met with a host of arguments as to why the whole gender pay gap is a myth. We all know when you compile research upon research there are many variables. These variables leave open windows for those who don’t agree to shoot holes.

But there are so many valid studies on the gender pay gap, it’s hard to refute that it exists, even if it’s not a simple number. It’s worth a dive into some of the research and societal pressures that fuel the debate.

First let’s outline the top myths on the gender pay gap.

Myth #1: Women choose lower paying jobs.

Some women may indeed “choose” lower paying jobs because they need the flexibility due to a partner with a demanding career, or because they are single mothers, or because family care requires it. That may account for some of the disparity in studies that do not isolate for equal pay for equal work. But there are numerous studies that control for factors like age, education, experience, and performance and still the gap persists. This research on medical professions found that male doctors earn $200,000 more on average than their female peers, even if they have the same specialty, experience, and education. In a recent analysis by Glassdoor, one of the largest job recruiting sites, the company concluded:

“Based on more than 505,000 salaries shared by full-time U.S. employees on Glassdoor, men earn 24.1 percent higher base pay than women on average. In other words, women earn about 76 cents per dollar men earn. However, comparing workers with similar age, education and years of experience shrinks that gap to 19.2 percent. Further, comparing workers with the same job title, employer and location, the gender pay gap in the U.S. falls to 5.4 percent (94.6 cents per dollar).”

The gap narrows to just a nickel when you control for same title, employer, and location? So what’s the big deal? Well, that’s more than $130,000 over the course of a career for someone making an average of $65,000. How many men would voluntarily sign up for that?

Myth #2: Women are a protected class, so employers can’t pay them less.

The Equal Pay Act of 1963 made it illegal to pay women less than men. Yet, it still happens. First, transparency regarding salary is discouraged in most workplaces. Many women who play by their employer’s rules will never know if they are being paid less than men for the same job. Second, women would have to confront their manager about uneven pay, a courageous act that can result in retaliation. Third, in order to enforce the Equal Pay Act, a woman would have to take her employer to court– an unpleasant journey for all involved. We have Alabama native and Momentum honoree Lilly Ledbetter to thank for getting rid of the 180-day statute of limitations for wage-related claims. That means if you do file a claim and the court decides in your favor, you can pursue damages for all of your years of employment, not just the last 6 months.

Myth #3: Women make less than men because they leave careers to have families.

While some women do leave their careers to have children, employers should not presume that all women will have children or that a woman will be unable to balance a demanding job just as well as her colleagues who are fathers. According to the Bureau of Labor and Statistics, 70% of women with children work. Another study by the Pew Research Center shows that 40% of women with children who work are the sole or primary bread winners for their family. Pair that with the fact that nearly 48% of women between 15 and 44 do not have children. Yet our society still leans towards paying men more when they have children, the so-called “father bonus”, based on stereotypes we have of men being the breadwinner for the family. Those same societal norms impose a “motherhood penalty” on women regardless of whether they have children, plan to have children, or never have children.

Negotiating Success

Posted on November 22, 2016 by momentum

Effective negotiation is one of the most critical skills to business success. Yet when asked to select the metaphor that best describes negotiation, most women chose “a trip to the dentist.” Ouch.

Last week Carol Frohlinger, an internationally known speaker and negotiation consultant, led Momentum’s leadership class through negotiation training. What we discovered is that with a new perspective and practice, negotiating can be a rewarding experience.

Some of the top stumbling blocks to negotiating identified by our group were:

Overlooking the opportunity to negotiate
Fear of rejection
Worries about how negotiation will be perceived by others (pushy, needy, greedy)
Difficulty obtaining “buy-in” from stakeholders
Lack of confidence

Carol had the class work in groups to role play real-life negotiations using the framework she published in her book Her Place at the Table using three types of “moves”: Power Moves, Process Moves, and Appreciative Moves.

“Power moves encourage the other party to recognize the need to negotiate in the first place.

Process moves shape the negotiation agenda and dynamic so you can be a more effective advocate.

Appreciative moves engage the other party by fostering both trust and candor in the negotiation.” — Carol Frohlinger

Throughout the day we examined how to gain agreement on the value of the thing being negotiated, and to create understanding that the value cannot be obtained without negotiation. Carol emphasized the importance of enlisting support and owning the process, both essential to managing what she calls the “shadow negotiation.” Finally, we explored ways to frame the talks so that our negotiating partners can “save face,” how to keep a stalled dialog going, and how to gain new perspectives that lead to agreement.

One interesting observation from the class is that women tend to find it easier to negotiate on someone else’s behalf than for themselves. Carol asked the class to imagine the opportunity to negotiate on behalf of someone we really care about: a sister, a team we manage, a co-worker we respect. It was amazing to see how quickly some women outlined value, owned the process, and clearly stated their case when going to bat for someone else.

Negotiating is complex and highly situational. Having a framework to follow, some practical guidance, and time to share experiences definitely helped this Momentum class up their game.

Attendee Ira Hodges, from HealthSouth, shared these takeaways:

Negotiation takes place in every area of our lives
It’s okay to negotiate for yourself
Find the negotiation strategy that works for you; there’s not no one right way.

For additional tips and resources on negotiating for women, visit Carol Fohlinger’s website negotiatingwomen.com.