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As a mother of five working in financial services for nearly two decades, I’ve had a front row seat to those who are financially prepared for anything, and the heartbreak of others who face a stark reality of consequences when they are not.
Recent research* we conducted of 10,000 Americans revealed some alarming findings about the financial habits of women versus men across generations. The research explores the connection between community involvement and financial wellbeing. It also draws attention to some simple, and more complicated, steps men are taking that women are not – and many are things within our control.
Move beyond day-to-day. While women and men are equally focused on day-to-day financial planning like viewing checking account balances, and developing or revising budgets, men are more focused on financial habits for the long-term, we found. Fewer women than men put money in a retirement savings account (39 percent vs. 58 percent) or emergency fund (41 percent vs. 53 percent). This makes sense as many women are focused daily on successfully managing their household and family activities, plus community and other commitments. But women need to seize the opportunity to change what they do today to help them in future years, too.
Pay down debt at least monthly. Paying down debt, and paying bills on time, can have the biggest impact on credit. Women should establish good credit for their family – and themselves – to build financial independence. Our research uncovered that fewer women than men are paying down credit card debt (57 percent vs. 63 percent) at least monthly and millennial women, in particular, lag in paying down student loans (28 percent vs. 38 percent of men). Make a plan to start nibbling away at these financial drains at least once a month.
Adopt a “saver” versus “spender” mentality. Pew research indicates women earn 80 cents on the dollar versus men. Not only are we making less, but we are saving less than men. In fact, a higher percentage of women than men describe themselves as a “spender,” particularly among younger generations, according to our research. Later in life, how many people do you think will say, “I wish I saved less?” I’ll make you a bet. None. This doesn’t mean to sacrifice everything. It simply means be selective with the choices you make and how you invest your hard-earned money.
Model good family financial planning for your kids: The good news is that despite the gender pay gap, an almost equal percentage of men and women currently share finances with a spouse or partner (93 percent and 95 percent, respectively) and manage the finances for a spouse/partner (53%, 51%) or children (34%, 35%). Although more men consider themselves to be the primary decision maker on financial matters (55 percent, 45 percent). It’s important for women to not only share the responsibility and decision-making for family financial planning for themselves, but to emulate it for their children and get them involved. According to a recent poll** we conducted of 500 parents of recent college graduates, three-quarters (72 percent) said they wish they had taught their child/children more about finances.
Be more strategic about community involvement. Friendship and personal improvement are key motivators for community participation among both men and women, our research revealed. But men are more likely to participate in communities for financial support, networking and mentorship, while women participate for personal support. Utilizing one’s personal network can help you succeed in many aspects of your personal, professional and financial life. In fact, 63 percent of women say their career has improved because of their community. And millennial women say that a community helped them saved more money and 38 percent have been supported by community during a time of financial stress.
*Conducted by PSB online in September 2017 using a nationally representative sample of 10,000 U.S. adults age 18 and above. Results are nationally representative of age, gender, race, ethnicity and education.
**Conducted by PSB online in May 2018 with 500 U.S. parents who have a child who graduated college in the past year.