Building Wealth through Financial Literacy

Collette Machado
1 hour ago
6 min read

When it comes to financial education, growth and wealth legacy, historically men have been and still remain at the forefront.

As of 2025, an analysis of the Wealth and Assets Survey indicated that men have an average total wealth of £378,079, while women have £300,017, a 21% gender wealth gap.

According to the 2025 Sunday Times Rich List data, women remain underrepresented among the top tiers of UK wealth. While the number of female millionaires in the UK has been growing faster than their male counterparts, women still represent a minority of the millionaire population compared to men. In fact, of the top 100 richest billionaires in the UK, only 15 are women.

But why are women lagging behind their male counterparts and why is the gap so wide?

Key factors driving the gender wealth gap include:

Pension Disparities: 
In many regions, men have substantially higher private pension savings, often 43% more,due to higher salaries and uninterrupted careers, making this the main driver of the wealth gap.
Motherhood Penalty and Care Work: 
Women disproportionately shoulder unpaid care work, leading to career breaks, part-time work and reduced promotion opportunities, which significantly reduces long-term income and savings.
Gender Pay Gap: 
Women earn less than men across similar roles, with data indicating they may only earn 85% of what men earn, reducing their ability to accumulate wealth.
Asset Ownership Structure: 
Women's wealth is more likely to be tied up in property or shared household assets, while men often have more individual financial wealth, such as stocks and private pensions.
Structural and Social Factors: 
Gendered stereotypes, career breaks, lower confidence in financial risk-taking, and in some cases, less inheritance (or receiving it later in life) contribute to lower wealth accumulation.

When it comes to Black women sadly the gap is even wider.

It cannot be argued with that Black women make an invaluable contribution to society as entrepreneurs and professionals. We continue to be the backbone of families, communities and movements. We are caregivers, creators, leaders and more.

Yet despite our talents and huge impact on the world, it does not go unnoticed that we often face unique financial challenges. Systemic pay gaps, limited access to capital, financial burdens and sometimes the pressures of being the primary or even sole breadwinner in many households.

For some Black women, taking on a second job is the only way out of a lifestyle of poverty whilst for others it is increasing their hours at work or moving to a higher-paid position. The need to make more money is for many the way forward, but it is not just to make more money.

“Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” - Frank A. Clark

As Black women we need to take our finances into our own hands. We need to be in control of our financial lives and destiny and this starts with being financially educated – or financially literate. We all know that education unlocks the doors to many opportunities and the same can be said when it comes to finances.

Our future and our wealth legacy is highly important and so it is crucial for us to equip ourselves with the right knowledge in order to lay down the foundation for generations to come. If we don’t there could be a detrimental impact, including increased poverty rates, persistent gender inequality, and a significant drag on global economic growth.

This would contribute to a widening gender wealth gap, where women, who often live longer than men, risk having insufficient assets for retirement, placing strain on public social security systems. 

By gaining financial knowledge, women can shift from passive saving to active investing, managing debt effectively, and creating long-term security. 

But how exactly does financial education or financial literacy help women become wealthy?:

1. Embracing Investing Over Saving

A significant barrier to wealth for women is leaving too much cash in low-interest savings accounts rather than investing in growth assets. 

Overcoming Risk Aversion: Financial education boosts confidence, helping women overcome the tendency to avoid investment risks and instead invest in stocks, bonds, and mutual funds.

Compound Interest: Understanding compound interest and investing early allows women to grow their wealth over time, often outperforming men when they do invest.

Diverse Portfolios: Education teaches the importance of diversification, which protects against market volatility and increases overall returns. 

2. Debt Management and Budgeting

Financially educated women can better manage their day-to-day finances, freeing up capital to build wealth. 

Reducing Debt: Knowledge of interest rates and repayment strategies helps women avoid or pay off high-interest debt, such as credit card debt, student loans which can hinder wealth accumulation.

Budgeting for Wealth: Rather than just tracking spending, education helps women create budgets that prioritise investing and savings for the future. 

3. Navigating Career and Life Gaps

Women frequently face career interruptions for childcare or elderly care, which can severely impact retirement savings. 

Retirement Planning: Education helps women understand the need for higher pension assets due to longer life expectancy.

Planning for Breaks: Financial education enables women to plan for these gaps in income, ensuring they can still contribute to retirement accounts. 

4. Maximising Earnings and Tax Efficiency

Salary Negotiation: Financial education is the confidence and knowledge needed to negotiate better pay and benefits.

Tax Strategy: Understanding tax-efficient investment vehicles (like ISAs and pensions) allows women to reduce their tax burden and keep more of their earnings. 

5. Increased Confidence and Independence 

Breaking Dependency: Financial education reduces dependency on partners or parents, which can otherwise leave women vulnerable to financial abuse or insecurity.

Empowered Decisions: Financially literate women are more likely to make informed, long-term decisions, rather than reacting emotionally to market fluctuations. 

6. Encouraging Entrepreneurship

Business Skills: Having a good level of financial education helps women understand capital, cash flow and credit, which are essential for starting and scaling their own businesses. 

Financial education acts as a tool to bridge the gender wealth gap by equipping women with the knowledge to manage their money, make strategic investments, and secure their financial future. 

So, how does this affect Black women in comparison to their white counterparts?

For Black women, financial education is more than learning how to budget or invest or about different financial concepts. It is an act of empowerment, about reclaiming control, creating options and building a legacy that extends beyond our lifetime. It is about shifting from survival mode to wealth-building mode.

Black women earn less on average than both white men and women, and often less than Black men.

The Fawcett Society highlights that Black and minoritised ethnicity women are at the sharpest end of inequality, as ethnicity pay gaps compound the gender pay gap.

In early 2025, reports suggest rising unemployment rates for Black women (reported as high as 7.3% in some sectors by early 2026), indicating wider labour market disparities. 

The key factors driving the gap were representation. The pay gap is largely driven by unequal representation, with fewer Black and ethnic minority colleagues in the upper pay quartiles. Job segregation. Black women are often underrepresented in senior, higher-paying roles and structural barriers. Significant differences in work history, such as time spent in part-time roles or unpaid care work, significantly contribute to the pay gap. 

Many of us Black women financially support extended family members while balancing our own goals. We are more likely to carry student loan debt and less likely to inherit generational wealth.

But here’s the truth: while we may not have inherited wealth, we can absolutely create it. Financial education is a critical driver for women to build wealth, enabling them to overcome unique economic barriers, such as the gender pay gap, career breaks for caregiving and longer lifespans, that often result in lower lifetime savings. By gaining financial knowledge, women can shift from passive saving to active investing, managing debt effectively, and creating long-term security. 

Financial education acts as a tool to bridge the gender wealth gap by equipping women with the knowledge to manage their money, make strategic investments, and secure their financial future. 

Black women are creators and inventors. We have built movements, businesses, art and culture that shape the world. Now it is time to build wealth, intentionally, unapologetically, and strategically.

Financial education is not just about money. It is about options and it is about ownership. It is about rewriting narratives that told us survival was enough.

Survival is not the goal. Wealth legacy is. Leaving a legacy for generations to come.

And we need to start now with one decision, to believe that you are worthy of being wealthy!

Now let’s take that first step on that journey.

Colette Machado is a licensed financial educator who teaches individuals and families how money works and various financial concepts to help them become debt-free and financially independent.

Colette is offering NBWN subscribers a personalised complimentary financial plan which covers areas such as goal-setting, budgeting, saving/investing, mortgages, debts, retirement and life and health protection and will help you take your first step towards financial freedom.

To book your appointment or if you have any questions, get in touch at cmachado@consultant.com or on +447576828332.