Women and Money: 6 Things Women Should Know about Money and Debt

Women and Money: 6 Things Women Should Know about Money and Debt
Key Takeaways:
  • Women are less prepared for retirement than men.
  • Overall, women earn less and owe more than men.
  • It's crucial to plan finances and save for retirement ASAP.

Women have taken their place in the workforce, holding the majority of jobs for the first time in a decade, according to the Bureau of Labor Statistics. While this shows progress, there are still many ways in which money and debt is more of a challenge for women than for men. From the gender pay gap to financial stress, find out what you need to know as a woman in our modern world.

1. Women are more stressed about saving money

If you’re frustrated when it comes to debt and saving money, you’re not alone. Women are generally more stressed about money than men, due to lack of savings. In fact, 47% of women said they don’t have an emergency fund and 28% said it would be very hard to cover an unexpected $500 expense—compared to only 15% of men who say it would be difficult.

What you can do: Talk to others. Head to MeetUp.com or EventBrite and search “personal finance” to look for events where you can discuss money and learn about saving, investing and much more. The more educated you are, the less stressed you’ll be.

2. Women earn 20% less than men

According to the Bureau of Labor Statistics, on average, take-home pay for women is 20% less than men. This is frustrating for women who work hard and are loyal to their company, co-workers and job. However, your paycheck isn’t the end-all, be-all.

The gig economy is booming for a reason — men and women everywhere are able to bring in more income if they can’t seem to get their salary to budge. Instead of waiting for a raise, take matters into your own hands by finding some freelance work.

What you can do: Leverage freelance opportunities to make more money doing what you’re good at. Common freelance jobs include: writing, web design, development, social media management, even running errands with TaskRabbit. It’s not just about Uber and Lyft.

3. Women are more likely to take on their partner’s debt

“I’ll take care of you…and your debt” — that’s what a 2019 report from Finder.com found. Specifically, 53% of women would accept their significant other’s debt, while just 47% of men said the same. This can be dangerous for you, as the person paying off the debt. Not only might your partner get themselves into a similar situation again, but it can put you in a financially compromised situation.

What you can do: If you’re thinking about helping your partner pay off their debt, consider these four scenarios when you shouldn’t be a debt savior:

  • If it puts you into debt

  • If your significant other is hiding things

  • If your intuition tells you not to help

  • If it threatens your own credit

4. Millennial women spend a lot on clothes

When it comes to spending, millennial women have a favorite: they spend $1,936 on clothing per year, on average. The good news is, this spending habit is an easy one to cut back on, while still enjoying shopping throughout the year. Not only can you buy clothing on sale all year long, but you can even rent dresses and outfits for special occasions, so you don’t max out your weekly budget on a piece of clothing you’ll only wear once.

What you can do: Spend less on clothing by shopping during annual sales or browsing the clearance section of your favorite stores only. You can also take advantage of thrift stores (online or brick and mortar), and use online coupon providers like RetailMeNot.

5. Women have more student loan debt than men

The total student loan debt in the United States is 1.46 trillion, according to the American Association of University Women (AAUW), and almost $929 million of that debt is held by women. This debt load has an even greater impact due to the wage gap, explains AAUW:

“Because of the gender pay gap, they have less disposable income after graduation. This contributes to the fact that women take more time—and face greater difficulty—than men do paying off debt.”

What you can do: While there are many routes to take, debt consolidation is a common strategy for paying off student loan debt. By bringing all payments into one, you limit the risk of missing a payment, and incurring extra fees, which can also help your credit score. Having more debt doesn’t mean you have to be stuck with it for the rest of your life.

6. Women aren’t preparing for retirement

Only 12% of women are “very confident” that they’ll be able to retire with a comfortable lifestyle, according to the 19th Annual Transamerica Retirement Survey of American Workers. The same report found that, while paying off debt is a priority for 65% or women surveyed, only 49% of them say that saving for retirement is a priority.

Unfortunately, the later you start saving for retirement, the less you’re likely to have when you’re ready to stop working. This means, you may have to work further into retirement or will struggle to live with the little you have.

What you can do: Get serious about retirement today. Some ways to do this: make small investments each month using a retirement savings or investment app, or put more money toward your 401K. You can find out how much you should contribute with online retirement calculators that ask how much you hope to have by a certain age. The calculator then gives you monthly retirement savings suggestions that you can use as your guide.

Women and Money: The bottom line

When it comes to women and money, there are a lot of challenges and even more to know if you’re a female trying to be money savvy. The good news is, you can educate yourself on how to save, how to do more for your 401K, and whether you should be taking on the debt of your partner to ensure you’re in a healthy financial situation. While the gender wage gap still exists, there are ways to do more with the money you have to ensure long-term financial success. Ladies, take control of your finances today!