The financial literacy gap between men and women is from structural, systemic and societal inequalities and barriers over time. (One example: It wasn’t until 1974 — with the passage of the Equal Credit Opportunity Act — that women won a legal right to apply for credit cards separate from their husbands.)
Why the Financial Literacy Gap Is So Important
The financial literacy gap — also known as the “secondary gender wage gap” — is so important because without financial literacy, women can’t build their wealth. They feel less confident being in control of the household finances, and this becomes an even bigger issue when their spouse passes away or if they go through a divorce. Women also may feel less confident about investing in the stock market. And women already earn less than men — without the financial knowledge about investing, they are at even more of a disadvantage.
Other financial hindrances? Women tend to live longer than men, which can make them financially insecure during retirement. Women are also often expected to leave the workforce during their high-earning years to take care of their children or aging parents. The COVID-19 global health and economic crisis, and how it has disproportionately affected women, has further underscored these issues.
Steps You Can Take to Improve Your Financial Literacy
Now that we know what we’re up against and understand why it’s so important to arm ourselves with financial knowledge, what steps can we take that are in our control?
- Listen to podcasts and books about personal finance. You don’t have to read a dense tome about finance. Listen or read something that you would enjoy.
- Find out what financial wellness programs are available at your workplace. Many employers offer workshops and programs on financial topics, such as understanding your 401(k), health savings accounts (HSAs), and flexible spending accounts (FSAs).
- Research financial advisors. As we say at The Humphreys Group, it’s not just about the numbers. Find a financial advisor who you feel comfortable with and can connect with.
- Attend a Conversation Circle. The Humphreys Group regularly hosts Conversation Circles where we have authentic conversations about money. Let us know if you’d like to join us at our next one!
- Talk about money with your family and friends. We as a society are conditioned to not talk about money. But money affects everything in our lives — why should something so pivotal in our lives be taboo to talk about? Have an honest conversation with your family and/or friends about money. As CNBC Make It suggests, host an event and 1. invite friends who are comfortable around each other, 2. set expectations ahead of time, 3. have topics ready (but let the conversation flow naturally), 4. ask questions, and 5. be open to new perspectives.
Continue the Conversation About Financial Literacy with The Humphreys Group
The Humphreys Group is passionate about empowering women in their finances and giving them the tools and resources they need to succeed. If you’d like to continue the conversation about financial education, reach out to our team today.