The global inflation crisis is affecting everyone, but data from the World Economic Forum shows it’s not impacting all groups proportionally. Women, in particular, are being hit heavily.
Not only are men in the U.S. 33.3% more likely than women to have their salaries keep up with inflation, price increases for women’s products are far outpacing men’s.
This further exacerbates a struggle women already face with the pink tax, widening the gap between the cost of products geared to each gender and putting significant strain on women’s budgets.
Add this to additional barriers to saving and investing women already face and building a budget that satisfies all your financial needs might seem impossible. Still, experts recommend strategies women can adopt to overcome these challenges.
[Read: How to Make a Budget — and Stick to It.]
“While the trend of women facing disproportionate inflationary challenges compared to men shows no signs of letting up and continues to impact women’s finances, you can choose to do something to alleviate its impact on your finances,” Alissa Krasner Maizes, founder of Amplify My Wealth, says.
Why is Inflation Impacting Women So Heavily?
It’s true that women’s products are rising in price faster than men’s, according to global cost data. But that is only part of the reason why the inflation crisis is impacting women so heavily. Additional challenges include an ongoing wage gap and a difference in spending patterns.
“Because women tend to shop more than men, inflation naturally hits harder. Women typically shop on behalf of others (family members, children, partners, etc.), so their purchasing power is higher,” Raya Reaves, founder and finance coach at City Girl Savings, says.
And according to Maizes, it can be difficult to disconnect from this pattern and put our own financial wellness first.
“As a woman and mom, I understand that there are certain things that I cannot imagine changing in my life, such as always wanting to help others and providing for my children and loved ones in some capacity, regardless of their needs and ages. The challenge is balancing what you want to do for others with the reality that, as a woman, you likely earn less and live longer, yet disproportionately experience more inflation than men,” she says.
How to Budget for a Higher Cost of Living
So, you’re making less money than men and spending more to maintain the same quality of life — how do you budget for that and still achieve financial security?
[READ: 15 Steps to Achieve Financial Freedom.]
“If women aren’t following a budget, aren’t setting limits for their spending and aren’t intentional with their financial decisions while costs are high, it could lead to a decrease in savings and an increase in debt. When inflation recedes, poor spending behavior may seem less impactful because things cost less, but that opens the door for even more spending,” Reaves says.
Now more than ever, it’s important to build solid financial habits. Follow these tips to accommodate a higher cost of living:
[Read: Inside the Psychology of Overspending and How to Stop.]
Prioritize Your Financial Future First
In a system stacked against women, putting ourselves first might feel difficult or unnatural. But doing so is crucial not only for your own financial success but for turning the tide on these ongoing trends.
“Prioritize your financial future over your wants as well as the wants of those that you care for; support businesses that recognize and support women; and take actionable steps to organize and ultimately strengthen your finances,” Maizes says.
“In addition to strengthening your finances by prioritizing your needs over wants, organizing and strengthening your finances are significant financially life-changing first steps,” she adds.
According to Reaves, this will require an honest look at your current income and expenses, as well as separating your spending into needs and wants.
“Be very clear about how much is truly coming in (after taxes and deductions). From there, ensure that all required living essentials are accounted for. This includes things like housing, groceries, utilities, minimum debt payments and other monthly responsibilities. The amount of income left after all of the essentials are accounted for is what you have left to work with,” Reaves says.
Build a Value-Driven Expense Plan
When building a budget, the first step is identifying your values and which categories are most important in your life.
“Considering what you value most is a great starting point for all expense plans. For example, a value-driven expense plan may include prioritizing the following values: health, fun, vacation and family. Once you have chosen what you value most, checking to see how your values align with your expense will likely result in you trimming your expenses and better accommodating items that may result in a higher cost of living,” Maizes says.
Find Opportunities to Spend Less
Once you have a solid calculation of your income and expenses — including what spending is most important for you — you can figure out how to make cuts.
“When it comes to restructuring a budget due to higher cost of living, I typically recommend my clients look at their discretionary categories. When cutbacks are needed to account for cost of living increases, the discretionary categories should be the first ones to be reduced. This includes limiting the number of takeout or dine-in visits, pushing out hair and nail salon visits or reducing shopping on nonessentials,” Reaves says.
Additionally, you might be able to save on pink-taxed items by researching alternatives, Maizes says.
Don’t Forget to Leave Some Room for Joy
It’s easy to get frustrated when you have to make cuts in your budget, especially when you’re facing inequalities. Reaves suggests making sure you leave some room for spending on the things you love so you don’t feel like you’re sacrificing as much.
“To ensure your budget is realistic, allocating some of the leftover income to the things that bring joy is very impactful,” she says. “Having something to enjoy life with can help you stay on track with the other limits of your budget.”
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The Inflation Gender Gap — How Women Can Budget for a Higher Cost of Living originally appeared on usnews.com
