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This Week In Your Wallet: The Economic Consequences Of Women Denied

Jean Chatzky  |  May 11, 2022

Plus, what Fed moves mean for you.

Apart from Mother’s Day (which I hope was lovely for all of you moms out there) it hasn’t been an easy week for women. I was just as horrified by the leaked Alito brief as I’m sure many of you were. As a result, some of us have spent this last week marching. Others have been donating. Some of us picked up a pen — which is always mightier than the sword, including HerMoney’s Editor-in-Chief Kathryn Tuggle, who wrote this scathing to-do list detailing some of the things women might need to stop doing if we apply Alito’s “deeply rooted in history” logic to women’s financial freedoms. (I found it as funny as I did horrifying.) Because there’s far more than just bodily autonomy at stake. This is also a fight — one we’ve been waging for decades — for women’s economic power. 

Many scholars argue that abortion access had a major impact in getting women into the workforce in greater numbers, as Emma Goldberg writes in this week’s New York Times. Women’s labor force participation rose from 43% in 1970 to 57.4% in 2019. The well-known Turnaway Study from University of California, which followed its female participants for five years, found that those unable to get abortions had worse economic outcomes. The study found that 66% of women who were unable to access abortion services were living in poverty six months later, compared with 45% of those who got the procedure. And this weekend, The Washington Post looked at a study that showed when women were turned away at an abortion clinic, they saw their overdue debts climb by 78%, and they experienced 81% more negative financial events, such as  bankruptcies, tax liens or evictions. In other words, it’s clear that any elimination of women’s rights is a backlash against the newfound freedom and financial power of the American woman, and that there are some people who would love nothing more than to see us live a life of unfulfilled potential and possible abject poverty. But. We. Won’t. Go. Back. We lay out details on how to get involved, including funds that need your support, how to find a protest near you, and how to support candidates who support women. 

Market Pain: No, It’s Not Over… But We Do Have Answers 

Even those of us who have resolved not to peek at our brokerage accounts or 401(k)s in an attempt to preserve a bit of our sanity know that we haven’t seen the last of market turmoil — and that it could get worse before it gets better. Take the end of last week: On Wednesday, the S&P 500 was up 3%, then on Thursday the Nasdaq plunged 5%, and on Friday, both the S&P and the Nasdaq saw slight losses — marking the longest losing streak since June 2011. Many of us are looking for patterns, or, if not patterns, certainly some light at the end of the tunnel. Others see opportunities.  

Last night, CNBC’s Karen Finerman and I hosted another session of InvestingFixx, our interactive bi-monthly program to get women invested. Karen had commented in one of our prep sessions that: “As painful as it is to lose money, I get excited — because I know things go too far.” In other words, these big drops in the market are chances — if you’re a long-term investor, and you’re not levered, she couched — to score some big wins over time. As she pointed out last night, in the dot com washout in 2001, Amazon traded at $6. (!)

It’s important to recognize, as Jeff Sommer writes in the New York Times, that financial markets will likely continue to struggle to come to grips with policy change by the Fed for some time. For decades, the markets have grown accustomed to encouragement from the Fed, but now, the Fed recognizes its number one priority is slowing inflation. Temporarily, that might mean an increase in unemployment, or a faltering economy, but, as Powell said, “we have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.” Until that happens, I hope investors can at least take comfort in the fact that the markets are reacting exactly as we might expect… Sometimes knowing the why is all we need to sleep better at night. 

How to Navigate? Depends on When You Want to Retire

As much as we wish that financial advice could be one-size-fits-all, the truth is that so many of the moves you should make hinge on when you want to retire, as Claire Ballentine and Suzanne Woolley write for Bloomberg this week. For starters, if you’re 25, it’s time to view market drops as an opportunity. If you’re 45 and you’re feeling a need to make some tweaks, you can think about diversifying away from bonds and toward defensive stocks. If you’re 65, we know this market pain is giving you the most stress. The first soothing balm you need is to check in with your advisor and see if it’s time to move some of your equities into bonds or cash, and if you need money right now, find out whether you can tap into other resources before you sell market holdings at a loss. And no matter how old you are, when stocks are falling, keep investing according to your financial plan — especially when it comes to your 401(k) contributions and broad-based indexes like the S&P 500 or the Nasdaq 100. 

And if you’re heading into a new stage of life and/or rejiggering your priorities post-pandemic, we’d love to have you join our next sessions for our 8-week FinanceFixx course, which start May 24th and June 28th. I’m continually amazed by the changes people are able to make after working with a coach in a group of like-minded people for just a few weeks. We’d love to see you there! 

Seriously, Why Are Gas Prices Still Going Up?

The cost of a gallon of gas is now back to its March high — what gives? As you might have guessed by now, it all goes back to the pandemic. When people stopped traveling, oil prices got very cheap, which led OPEC to slash production. Of course demand quickly came roaring back, and is now back where it was pre-COVID. But, as Jim Patterson writes for Kiplinger this week, “oil production takes a lot longer to restart than oil consumption.” Essentially, the price fluctuations we’re seeing now are a product of how long it takes to restart wells, get drilling operations up and running, and source oil from different countries, since we’ve also had to rethink a portion of our supply given the war in the Ukraine. In the long term, there’s good news and bad news: Prices are unlikely to come down anytime soon, and will climb even higher before the end of the summer… but they will come down, eventually, once the supply chain is back up and running at its 2019 pace. For now, though, I’d definitely take a look at summer road trip destinations that are a little closer to home. 

 

Have a great week, 

Jean 

P.S. If you’re still waiting on your tax refund, you’re one of millions of people facing delays. But on the upside, you may stand to earn guaranteed 4% interest on the money the IRS is holding onto — money-market funds and savings accounts aren’t paying even half that (More like one half of one percent.) The IRS pays 4% interest to waiting individual filers, and it made $3.3 billion in interest payments the last fiscal year. Just how long do you have to wait? The IRS has 45 days to process a tax return and pay a refund. After that, interest starts accruing each quarter. So, keep an eye out for your check — possibly an even larger one than you were expecting. 

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