Millions of Americans are struggling financially. According to the 2022 Retirement Confidence Survey, 34% of workers surveyed said that the total value of their savings and investments (excluding the value of their primary home) is less than $25,000, while roughly one in five respondents reported having less than $1,000 saved. Yikes.

The situation is often even worse for women, as they face certain headwinds in their financial lives. There's cause for optimism, though, because many women (as well as men) can improve their financial situations significantly over time -- even if they're underpaid and overworked.

A health care worker is facing the camera, arms crossed, and smiling.

Image source: Getty Images.

The bad news: Women face many headwinds

There are a bunch of reasons why women are more financially strained than men. Here's a look at a few. 

Women tend to earn less

This is not news to anyone, but the extent (and persistence) of it might surprise you. Per the Pew Research Center: "The gender gap in pay has remained relatively stable in the United States over the past 20 years or so. In 2022, women earned an average of 82% of what men earned." And a 2020 article in The Atlantic noted that women dominate 23 of the 30 lowest-paying jobs in America.

Women are often out of the workforce for a while

Many women find themselves out of the workforce for a number of years -- often to stay home and raise children, or to tend to aging parents or other loved ones. This means that many of them will have socked away less money for their futures, and it also means that they'll have paid less into the Social Security program, leaving them with smaller benefits in retirement.

Women live longer on average

Then there's this: On average, women live longer than men. That's a good thing in many respects, but it also means that their retirements can last longer than those of men, leaving them dependent on their smaller nest eggs for more years.

Women are often not financially savvy

It's also true that lots of women, like many men, were never taught much about managing their finances -- and in many cases, they were taught less about it because it was assumed that their future husbands would manage the household finances. This may be less of the norm today, but there still remain many women who have found themselves needing to manage their money (perhaps because they have outlived their husband) and are not very confident in their ability to do so.

The good news: Wealth-building is possible for many

Fortunately, wealth-building is possible for many people over the long term, as long as they're able to invest money regularly. That's hard to do when you're underpaid, of course -- but you may be able to generate some extra dollars for your future in various ways. For example, you might seek a side gig that's not too unpleasant, such as giving music or language lessons, making and selling things online, or even driving for a ride-sharing service. If you're able to qualify for a higher-paying job or career via some training or coursework, all the better.

Considering that the overall stock market has averaged annual gains of close to 10% over many decades, it's not unreasonable to hope for average annual gains of 8% during your particular investing period. Here's how much money you might amass over time at that rate, socking away around $75 per month or $200 per month:

Growing at 8% for

$4,000 Invested Annually

$10,000 Invested Annually

5 years



10 years



15 years



20 years



25 years



30 years



35 years



40 years



Data source: Calculations by author.

You don't need to master stock market investing, either -- you might just keep plunking long-term money into a low-fee index fund, through which you can get roughly the same return as the overall market. Index funds can be surprisingly powerful growers.

Good examples

The reality of being low paid can really make life hard and can make it very difficult to save and get ahead. But some people have done extraordinary things in such situations. 

  • Oseola McCarty was born poor in rural Mississippi in 1908 and worked as a washerwoman. She retired in 1995 with $280,000 in savings and was able to make a big contribution to the University of Southern Mississippi.
  • Gladys Holm, who died in 1996 at age 86, worked as a secretary, never married, and never earned more than $15,000 per year. By investing in the stock market -- rather savvily, it seems -- she was able to leave $18 million to the Children's Memorial Hospital in Chicago.
  • Thomas Drey, who worked as a school teacher, amassed more than $6 million through investments.
  • Ronald Read, who had worked as a gas station attendant and a janitor, quietly amassed some $8 million through frugality and investments.

These are just some of many examples showing that remarkable wealth can be amassed even by people of rather ordinary means. So if you're underpaid and overworked, don't give up hope. It's not easy, but you may be able to improve your financial condition more than you would have thought.