The Motherhood Penalty: What Every Woman Needs to Know About Lost Income

Hey Reader!

Did you know that becoming a mom can reduce a woman’s income for the rest of her life?

It’s called the Motherhood Penalty, and it’s one of the biggest contributors to the gender pay gap. According to the National Women’s Law Center, full-time working moms earn just 74 cents for every dollar earned by fathers in similar roles.

Why does this happen?

Time off: Women are more likely to pause their careers or work part-time to care for children, reducing their long-term income
Missed promotions: Moms often pass up advancement opportunities to maintain work-life balance
Workplace bias: Mothers are sometimes perceived as "less committed" or reliable than women without children

This is why I constantly encourage young women to think early about financial independence. Money saved today buys freedom tomorrow.

No class in school prepares you for the financial trade-offs of motherhood — but the impact is real. A decline in income doesn’t just affect your paycheck — it delays debt payoff, shrinks your savings, limits investment opportunities, and reduces Social Security benefits.

If your mom stepped away from work to raise you, send the flowers — but also consider starting a money conversation. Ask how you can support her financial goals. Maybe even start a personal finance book club together. You don't need to have all the answers. Ask questions and learn together. Here are two places to start:

📘 The Money Journal — Money exercises you can do together

📚 Smart Women, Finish Rich — A great read to open the conversation

And if you’re currently staying home to raise kids, don’t forget: you can save for your future. One great tool is a Spousal IRA (see video below) — it allows non-working spouses to invest for retirement and take advantage of compound interest over time. It's a win-win for the entire family.

Motherhood is a profound blessing, but it often comes at a financial cost. Let’s keep talking about it, planning for it, and changing the systems that make it so hard.

Happy Mother’s Day!

Here’s to strong moms, strong money moves, and stronger futures.

X Catherine