Helping young women achieve better financial wellness could lessen the gender gap illustrated in a recent Bank of America study.¹
Based on a survey that used a 100-point scale to measure financial wellness, the study found that men scored an average of 67 points—a full 9 points more than women, representing a 13.5 percent gap.
In essence, financial wellness encompasses a person’s relationship with money, including:
- Current financial situation, budgeting, money attitudes and habits, financial stress, etc.
- Future financial security, including emergency savings, financial plans to meet goals, retirement goals, and more.
Unfortunately, the study found that women trail men in both areas.
Men were more likely to be better at:
- Managing expenses
- Managing credit card debt
- Managing long-term debt
- Planning for the unexpected
- Preparing for retirement
The only area in which women excelled was in protecting their assets: Having the right legal documents in place – such as wills, healthcare proxies, power of attorneys, and living wills.
Reasons for the gap include:
- Statistically, women live longer and will need more money to retire.
- Women are more likely to leave the workforce to be caregivers for children, spouses, and parents.
- The gender wage gap, where women earn less than their male counterparts.
- Women tend to invest less.
Women Lag in Wealth Building
Generally speaking, the study found that women are not as likely as men to participate in activities that build wealth.
- Men are more likely to have a health savings account (HSA)
- Of those who have an HSA, men have higher balances and save more HSA money
- Men invest their HSA money rather than leave it in a savings account to achieve market growth
- Men have 37 percent more in their retirement accounts than women
- Men are more likely to participate in company 401(k) plans
- Men are less likely to take hardship loans from their 401(k)
- Men contribute more pre-tax money to their 401(k)
- Men are more aggressive investors than women
Helping your female students understand the value of wealth-building activities could help them increase their financial wellness scores despite gender differences related to employment.
Providing a Student Financial Wellness Program
A holistic program like iGrad can help all students assess their current financial wellness. These programs provide financial information, resources, actionable steps, and tips. All of which help students gain healthy financial habits and track their progress over time in a fun, engaging environment. iGrad can effectively teach young women about:
- Creating and using a budget
- Reducing credit card debt
- Managing long-term debt, including student loan debt
- Investing wisely
- Short- and long-term savings
- Planning for retirement
Imagine the advantages your female students will have as you help them close the financial wellness gender gap.
1 – https://www.bofaml.com/content/dam/flagship/institutional-retirement/id20_0903/documents/Financial-Life-Benefits-Impact-Report-2021.pdf
