How to Close the Financial Gender Gap

By The Twirlit Team on October 29th, 2009

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Listen up, ladies! According to a recent survey by Financial Finesse, a financial education company headquartered in California, there is a serious gender gap when it comes to money management—and women are on the wrong side.

Survey results showed that women are lagging well behind their male counterparts when it comes to paying their bills on time, paying credit cards in full each month, spending less than they earn, and saving a sufficient emergency fund (enough to cover about 3 months’ worth of expenses).

The survey depended on self-selecting participants (3,500 men and women who wanted to take one of the company’s financial education classes) and self-reported behaviors, but still, odds are, the results are fairly accurate. If anything, participants probably skewed their results to appear more financially adept than they actually are, so the results for women are still looking pretty grim.

Now, I know what you’re going to say: Women are the innocent victims of a glass ceiling. It’s true that women tend to earn less and may be more likely to fill low-paying jobs, but the majority of respondents in this survey made between $60,000 and $75,000 annually—well above the poverty line and enough to make the results that much more shameful.

So, the bottom line is, women need to step up to the financial plate and start tackling this gender inequality as they have so many others. And how do we do it?

TAKE OURSELVES SERIOUSLY AS FINANCIAL BEINGS. Recent studies have shown that women are taking a greater role in the purchasing decisions of most households. Gone are the days when a man decided where the family lived and what car they drove. Nowadays, many women contribute to the family income, so they also help determine how it’s spent. To paraphrase Peggy Lee, we’re bringin’ home the bacon and fryin’ it up in the pan. So why do we still lack confidence in our abilities to handle money?

Part of the reason is that we still lack money skills. I’m not talking about an understanding of no-load mutual funds or the ability to calculate compound interest in our heads. No, I’m talking about basic, everyday financial principles, like spending less than you earn and paying your bills in full and on time. Contrary to popular belief, these are skills that can be learned and developed over time. Start early (moms, use your kids’ allowance to teach them about saving, giving, and spending) and practice often. If you find yourself really struggling, get help from an expert, whether it’s a financially savvy family member or a financial education company like Finesse Financial.

GAIN SKILLS–AND CONFIDENCE. Once you do, you’ll start developing confidence, which will in turn prompt you to ask questions and learn more. Once bills are being paid and debt has been minimized, women can start long-term savings for retirement and short-term savings for emergencies and, of course, the fun stuff (vacations, new cars, etc.). Contribute as much as you can to your retirement funds, and make sure to take advantage of any matching funds your company may offer.

Women still make less money than men and most spend less time in the workforce due to childbearing and childrearing, so it’s important that we start retirement planning early and make allowances for these differences. Today, women’s retirement funds average one-quarter of men’s—is it any wonder so many single senior women live on the edge of poverty?

Certainly, societal changes still need to be made—equal pay for equal work being chief among them—but there’s a lot we women can do right now to help make our financial futures a little brighter.

So c’mon ladies! No more waiting for Prince Charming to ride in with his million-dollar trust fund and a black American Express card. Let’s pull up our financial bootlaces and rescue ourselves.