Inside the wallet… In honor of Equal Pay Day and Women’s History Month, we’re diving into how American women earn, save, and invest.
Earning... The first step in money management: having $$$ to manage. Women are the sole or primary breadwinners in 40% of US households with kids. They outnumber men in the college-educated workforce, and have received more college degrees than men since 1981. But they still earn less: an average of 82 cents for every $1 men earn (aka: the gender pay gap).
Saving... Even though women earn less, they're better savers. Women allocate more of their money to savings than men (41% vs. 35%), and save more of their salary (9% vs. 8.6%). Women are also more likely to join workplace retirement plans. Still, men end up with higher net savings: women’s average total retirement savings is just $23K — men’s average is over 3X higher at $76K.
Investing... When it comes to investing, women tend to take a more cautious and measured approach than men. Women are good at saving money, but not as good at placing it somewhere where it has the potential to grow.
Women have plenty to be confident about… They’re disciplined savers and strong investors — but they tend to be less confident in their financial prowess. Only 9% of women believe they make better investing decisions than men, despite evidence to the contrary. Women also tend to be less confident that they’ve planned adequately for retirement, and they scored lower as a group on FINRA’s financial literacy test. Women have made a lot of financial progress over the past decades. But to truly level the financial playing field, Americans need to close the pay gap and improve financial literacy for all.