Closing the 'financial literacy' gender gap: Younger women have more desire to save
Women report feeling knowledgeable about day-to-day finances such as paying bills and saving for emergencies, but less confident about building wealth and creating investment portfolios, a New York Life Wealth Watch survey found.
Women report feeling knowledgeable about day-to-day financial responsibilities such as paying bills, maintaining good credit and saving for emergencies, but they feel less confident about long-term financial responsibilities, including building wealth, creating investment portfolios, understanding protection products like insurance and legacy planning, the survey found. For example, 64% of women feel very and somewhat knowledgeable about saving for retirement compared to 76% of men.
A potential reason for a financial knowledge gap between men and women is the exposure they have had to formal financial literacy education. The survey found 42% of women had received financial literacy education while 52% of men had. Younger women are more likely to report receiving formal financial literacy education than Gen X and baby boomer women (53% vs 34%, respectively).
The study found women want to have a larger role in making financial decisions for their households and want more information on financial topics like building wealth. The leading financial topic Gen Z and millennial women want to know more about is buying a home (30%).
“Although our research shows a perceived knowledge gap, the data shows an encouraging trend,” said Jessica Ruggles, corporate VP of financial wellness at New York Life. “Financial education for women is evolving – Gen Z and millennial women report having received formal financial literacy education at much higher rates than Gen X and baby boomer women. There’s an increased desire to invest, save and achieve financial freedom, as 82% of women report wanting more financial information that reflects their interests, including buying a home. Financial experiences and confidence vary by age, suggesting the need for women to seek individualized support and guidance from a financial professional.”
Related: Women on the ‘wrong track’ for retirement? Most want a ‘pension-like income stream’
Women shoulder a disproportionate burden of the high costs of childcare and elder care along with associated debt, which is another likely factor in women describing managing household finances as stressful. More than a fourth (27%) of caregivers say their personal finances have been impacted because of caregiving and almost half (48%) agree that caregiving responsibilities have put them in a difficult or financially precarious position at some point. At the same time, 61% agree that caregiving responsibilities have prompted them to become better at building and adjusting a financial strategy. Those learnings from lived experience can work in tandem with support from improved workplace benefits and access to financial guidance to help caregivers both manage financial challenges and find more secure financial footing for themselves and their families, said the report.