The Pink Tax Affects Women’s Financial Planning

March is Women’s History Month and part of finding ways to help women find financial stability and use their resources wisely is recognizing the systemic biases that can get in the way of an individual woman’s financial planning. One of these things is the pink tax. If you didn’t know the pink tax is a collective term for when women are charged more than men for goods and services. Sometimes these goods and services are made and marketed specifically towards women and sometimes they are not. And since we know that often women earn less than men for the same work, the pink tax is another thing that hampers women’s financial freedom.

In “The Pink Tax: What’s the Cost of Being a Female Consumer in 2020?,” Listen Money Matters gives a broad overview of how historically women have paid more for products :

“Women being charged a higher price for things isn’t new. The sales tax system in the United States was created decades ago. Politicians had to decide which products would be subject to a sales tax and which would be tax-free. But things have changed since these decisions came about, and tax policies have not changed to reflect the times.”

Often women’s clothing costs more than men’s clothing and manufacturers cite the need for more cloth or different kinds of stitching to explain why. But what about hygiene products that women and men use, such as razors? Listen Money Matters notes that women often pay more for these products too, even the cheaply-made women’ razors that only differ from men’s razors in color.

And what about services? Some dry cleaners charge more for women’s garments than for men’s. They are using the same machines but may also justify the higher price saying that women’s garments are somehow more complicated.

The Listen Money Matters article also discusses research which found that women are quoted higher prices for auto repair and may get quoted higher prices for used cars (Although in fairness, “People will take advantage of uninformed consumers no matter what their gender.”)

So, what can be done?

We can continue to put pressure on lawmakers to stop taxing (or even charging) women for products they need (Recently, the Scottish parliament approved free sanitary products for all women.)

If you work in an industry that charges women more and are in a position to work towards change, do so.

And for women, money management is important and you can seek the help of a Fee-Only financial planner to reach your financial goals.

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©Bring Clarity to Your Finances. The Pink Tax Affects Women’s Financial Planning is a post from Bring Clarity to Your Finances

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Claire Emory, MBA, CFA, CFP®

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