By Sonya Sellmeyer, Consumer Advocate
This article is the second of a three-part series on closing the financial literacy gender gap.
Throughout the United States, women lag men in financial literacy. Although many women have a basic understanding of money and can manage it on a day-to-day basis, they often lack the deeper understanding of personal financial planning and management — and this disparity has far-reaching negative repercussions.
Financial knowledge leads to better financial decisions, which leads to greater financial success, which yields benefits across many of life’s metrics, including attaining a post-secondary education, earning a higher-paying job, becoming an entrepreneur, achieving home ownership and investing in the financial markets. Most importantly, financial literacy is critical to every women gaining the financial independence to invest for a secure future and retirement.
There is a stigma in the U.S. that influences the perception that women are bad with their money because of their gender, versus the reality of a lack of financial education and pay inequality.
In pop culture women are often called shopaholics, although less than 6% of the U.S. population has compulsive buying disorder and research does not support the disorder is more common in women. Likewise, women have been portrayed as gold diggers, but a recent study of millennials found 41% of men, versus 15% of women, said they would marry someone who earns more than they do so their partner can pay off their debts.
These depictions of women lead to misconceptions of women being big spenders, money hungry and relying on a man to manage their money. What women really need is for society to avoid negative stereotypes of a female’s relationships with money. Instead, we need to provide women with a solid financial education, starting at home by involving daughters in day-to-day financial planning and decision making while advocating for all women to lean in and earn equal pay for equal work.
Although it’s been more than 50 years since Congress passed the Equal Pay Act (EPA), mandating that men and women receive equal pay for equal work, women today only earn 80 to 85 cents for every dollar a man earns. That equates to earning up to $450,000 less than a man over a lifetime.
Between the pay and retirement benefits disparity, unpaid family caretaking and living five years longer than their male counterparts, the average American woman is at risk of not having a secure retirement.
The Iowa Insurance Division believes it is critically important for women to have access to financial education resources and the tools to learn how to save for a secure retirement. As your state government agency, we are here to help provide financial literacy to all Iowans through our Save4Later educational curriculum and the public outreach program created specifically for women, SmartHER Money.
I invite you to read the next article in this three-part series on closing the financial literacy gender gap and to learn more about the importance of financially empowering women and paving the way for the future generations of girls.