Women’s financial health has hit a 5-year low, report says
Financial stress worsened for women during the pandemic, but rebounded relatively quickly as the labor market recovered, however, it’s been driven further down with high inflation and limited abortion access.
Women’s financial health is at its lowest point in five years, according to a new report by Ellevest, a financial planning and investment company. The report, which pulls data from Ellevest’s Women’s Financial Health Index as well as a survey of 2,500 workers, found that factors including inflation, lowered consumer confidence, and the overturning of Roe v. Wade have all contributed to a more negative financial outlook for women.
Overall, the Ellevest Women’s Financial Health Index has fallen to a value of only 1 as of July 2022, compared to 9.8 before the pandemic. The results of the index were calculated monthly from May 2018 through this July, using 12 indicators including women’s employment rate, the consumer confidence index, inflation, the gender pay gap, paid family leave, abortion access, and corporate leadership.
“We have long known that money is women’s #1 source of stress,” says Dr. Kate Sullivan, Ellevest Head Data Scientist. “This issue has only become more acute as women’s financial health has deteriorated. In fact, the Ellevest Women’s Financial Health Index shows that women’s financial health is currently the worst it’s been in the last five years. Women’s financial health worsened during the pandemic, primarily due to employment levels, but it rebounded relatively quickly as the labor market recovered and access to paid family leave began to expand.
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“Since then, however, it’s been driven further down, as high inflation impacts her spending power and the overturning of Roe v. Wade clouds her economic future. No wonder consumer confidence has been falling, even as women return to the workforce.”
Top worries for women
According to the report, the top worries for women deepened according to their age. For older women, inflation and the potential for an impending recession were high priorities, while younger women said their biggest worries were reproductive rights and job security.
For women overall, these concerns have led to increased anxieties about money. For instance, 43% of women said they actively worry about money at least once a day, compared to only 36% of men, according to the report. Likewise, 59% of women worry about money more than once per week, compared to 55% of men.
The Supreme Court decision to overturn Roe v. Wade has also affected women’s financial outlooks, with more than half of women saying their financial mindset has changed following the ruling.
Other survey findings include:
- More women are prioritizing financial wellness than before, with 42% of respondents ranking it as important in 2022 vs. only 14% in 2021
- 63% of women have reduced their day-to-day spending in the face of economic pressures
- Amongst women who were already investing in their retirement, 75% have continued to do so despite the changing economic situation
- Fewer women (38%) are concerned about market volatility than men (58%)
Sallie Krawcheck, the co-founder and CEO of Ellevest, indicated in the report that womens’ financial wellness is an important issue, saying, “When women are financially healthy, our communities, economies, and planet are all better off.”