Knowing your worth: Financial tips for women in their teens, 20s, 30s and beyond

'Financial Nutrition for Young Women' author Melissa Donohue helps educate us in ways to close our personal wage gap
By Amy Wilkinson  Published on 11/08/2018 at 9:00 AM EDT
Sharon McCutcheon/Unsplash

It’s been more than 55 years since President John F. Kennedy signed the Equal Pay Act of 1963 into law, with the intent of ending pay discrimination based on gender. Yet, in 2018, American women are still earning just 80.5 cents to every dollar earned by men, and it doesn’t look like that sad statistic will be changing anytime soon: According to the Institute for Women’s Policy Research, if reforms continue at the same rate they have for the past five decades, women won’t reach full pay equity until the year 2059.

“The ramifications [of the wage gap] are several and severe,” says Melissa Donohue, author of Financial Nutrition for Young Women: How (and Why) to Teach Girls About Money. “Women make less money and they also move in and out of the workforce because they tend to take greater responsibility for both child care and elder care. What that means over a lifetime is that women tend to have far less savings than men and women are 50 percent more likely to end their lives beneath the poverty level than are men.”

While the odds may seem insurmountable, Donohue says that women do have the power to turn the tide. Here, she offers strategies to help close your personal wage gap—and safeguard your future—through the years.

Tweens and Teens

Sure, your 12-year-old isn’t bringing home a steady paycheck, but this period of her life is still integral to her future financial success. Now is the time to instill basic money lessons (such as creating a budget and understanding the concept of compounding interest) in addition to the confidence necessary to eventually ask for (and earn) equal pay. For the latter, Donohue recommends an exercise she calls “What Am I Good At?”

RELATED: Tips for teaching your kids about financial literacy

“Start with a small notebook and every night before bed write three things you did well that day,” she says. “Every few months you look and begin to see trends. ‘I’m good at math—I always got a good grade on my math quiz.’ Or ‘I’m really good at helping my friends.’ Learning how to articulate your worth and your value is a huge issue.”

And, of course, giving them some real-world experience early on won’t hurt either. “A part-time job is a great way to both earn money, and actually have a real experience of managing money,” says Donohue.


From practically the moment a woman doffs her college cap and gown, she’s at a financial disadvantage to men, says Donohue. “There’s research out there that young women out of college are under-negotiating their male counterparts by about five grand a year based on a $35,000 median salary. If you are getting percentage increases over time your salary basically compounds. So starting at a lower level can cost you, according to this study, hundreds of thousands of dollars maybe even in the low millions over the course of a lifetime.”

To be sure, negotiating isn’t an inherent skill—and it’s not always one women feel comfortable pulling out of our toolbox either. In fact, according to Donohue, some 70 percent of women don’t negotiate. But that also means a good percentage of us aren’t earning what we’re worth.

“The first key is understanding how this all works when somebody offers you a salary,” says Donohue. “Unless it’s something like civil service where you’re tied to a pay grade, typically they don’t offer you the highest number that they can.”

Do some research into what someone with your position and experience typically makes in your market (see below for more tips on how to do that) so you can ask for just the right number.

“[That way] you can avoid both undervaluing yourself or asking for a number that is unrealistically high and losing credibility,” says Donohue.

Thirties (And Beyond)

So you’ve been in the workforce for 10, 20, or 30 years—there’s probably not much you can do about the wage gap at this point, right? Wrong. It’s never too late to ask for what you deserve. But your most important first step is to do some research to confirm that you are, indeed, being underpaid.

“Certainly the challenge with salary negotiations is there’s the information asymmetry where you don’t have the same information that your employer has. You don’t know necessarily what they’re paying other people or what they’d be willing to pay for you in a best-case scenario,” says Donohue. “It’s important to get as much information about your market as possible, [about] people in your market in your job in your region…. Find out perhaps from people at comparable firms.” Also be sure to check salary comparison websites like Salary.com, Glassdoor, and PayScale.

“You need to understand your market because that’s the beginning of your request: ‘I’m under-compensated for what I do in New York.’ ”

And if you have been underpaid all these years, it’s probably a good idea to use a retirement calculator (like NerdWallet or AARP) to see just how much that gap has affected your potential nest egg and whether you need to recalibrate your savings for the future.

Whether it comes to closing the wage gap or just being mindful about your money, the bottom line, says Donohue, is to get educated.

“The reason I named both my book and my business Financial Nutrition is because many people believe that having enough money or having a lot of money is some kind of mysterious alchemy that only rich people understand, and if you weren’t born that way or somehow struck over the head with it, well, good luck to you, you’re never going to figure it out,” says Donohue. “The beauty for me of the term ‘Financial Nutrition’ is taking care of yourself with money the same way you might with food or exercise and that it’s something, barring terrible circumstances, is a practice that’s available to anybody.”

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