Buying a flat, having children or saving for retirement: the weight of the wage gap on a day-to-day basis

The objective fact that the wage gap between men and women for similar jobs is, on average, 5,175 euros per year has direct consequences on quality of life. Having fewer economic resources makes it more difficult to meet basic needs and paying bills becomes more difficult.

The financial vulnerability that emerges from this gender inequality takes dozens of forms and extends across various areas, from access to education or medical care to the ability to save. A Raisin report puts the spotlight on the consequences of the pay gap and the impact on women’s financial goals. Considering that not all individuals seek to follow the same life script, there are some aspirations (goals) that are common, such as getting married, buying a home, or having a child. And facing them, of course, does not cost more when there is salary discrimination.

Women have to save 13 months more than men to face the mortgage

Buying a home is generally a long-term investment that provides financial stability and security. However, it also stands as one of the most important financial objectives and that, in most cases, requires a mortgage. The average cost of a mortgage in Spain is around 9,100 euros per year. To assume that figure, women have to save for a little over a month more than men. If the average mortgage is considered (between 20 and 30 years), the difference grows exponentially (around 13 months) although the calculation will vary depending on the interest rates of the loan.

As for the recommendation that the monthly mortgage payment not exceed 30-35% of salary, it is not met by any gender, although with a high difference. In the case of men, this percentage is a little higher, 39%, while in the case of women it amounts to 50%, half of their salary.

And getting into buying a house involves other steps that also involve a significant outlay. Furnishing it costs, on average, between 10,000 and 15,000 euros. To collect them, women would have to save nearly nine months more than men.

Having a child is another vital step that involves an economic outlay that also torpedoes gender inequalities. The cost of having a child in Spain it is around 9,570 euros a year (more than 300,000 euros until they emancipate) which translates into 52% of a woman’s salary and 41% of a man’s salary. The effort is greater in the first five years, in which almost 48,000 euros are allocated to breeding. According to the study, women take to pay for that study six and a half months longer than men.

Pay for a wedding for those who decide to get married and celebrate it will depend a lot on the city, the place chosen, the menu… In general terms, the average cost of a wedding in Spain can range between 15,000 and 20,000 euros. Just to pay half of a wedding (10,000 euros), a woman would have to save more than seven months more than a man.

Nearly an additional month of effort per year to meet basic bills

Outside of big decisions or events, the simple fact of facing the general cost of living for one year (food, rent, bills) already represents inequality and is something that all households face (each one with its own characteristics): food, Rent and bills are a common basic expense.

The overall average cost is around 8,200 euros per year, which would mean about four and a half months of savings for men and almost five and a half months for women; almost an extra month of effort to meet the basic bills. While men dedicate 36% of their salary to general living expenses, women dedicate 45%.

The saving capacity is evidently diminished for them. In fact, the study shows that the wage gap becomes more pronounced in this regard.

It will take a woman longer to meet the minimum deposit requirements and therefore it will take longer than a man for his savings to perform at the same level. In the time that a man is able to save 20,000 euros, using 20% ​​of her salary, a woman would only accumulate 15,705 euros. For example, with an interest rate of 3.10% APR for one year, a man with 20,000 euros would be able to achieve a return of 620 euros while a woman who invests 15,705 euros obtains an income of 487 euros.

Saving for retirement, an important step for future security. The average retirement pension for women is 33% lower than that of men due to more precarious jobs, lower wages and part-time work derived from care tasks, which women continue to carry out to a greater extent than men. The difficulty to save during the active years draws a darker retirement than that of men.

Making a calculation with the annual salary of both with 49 years of contributions and considering a saving of 10% per year, men would be able to retire at age 65 with savings of 133,000 euros, while to retire with the same conditions women would have to work more than thirteen more years, up to 78 years.

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Deborah Acker

I write epic fantasy; self-published via KDP. Devoted dog mom to my 10 yr old GSD, Shadow! DM not a priority; slow response at best #amwriting #author.

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