Let’s go girls! As we’ve talked about before, women encounter patronizing “tips” and stereotypes constantly when it comes to finances and money. This breeds confusion and shame and sends the message that finances are a masculine concern. Which is bullshit. Normalizing conversations about money and educating ourselves about finance is so important for women.
Financial literacy is being able to understand and use personal finance tools and fundamentals to build a healthy relationship with money. Without financial literacy, we become stuck in a cycle that limits our growth and opportunities and does the same for future generations. This is obviously a complex issue; below are just a few of the reasons why it’s important for women to be financially literate.
Lack of financial education holds women back
The U.S. Department of Education says that 3.8 million American adult women have financial literacy skills below a basic level. “Women lacking competency in financial literacy face serious repercussions, such as taking on large amounts of credit card debt, defaulting on student loans, and experiencing difficulty managing income, taxes, and investments,” reports Annuity.org. That’s all pretty f*cking stressful, and it can mean a lifetime of chronic stress.
Additionally, financial insecurity is a main reason why women have trouble leaving abusive relationships and why they return to them. A recent report found that “improvements in women’s financial literacy can significantly reduce the rates of violence against women perpetrated by their male partners.”
And our relationship with money begins at a young age
Our early experiences with money have an impact throughout the rest of our lives. Research has shown that we understand the concept of money by age three and develop money habits by age seven. So not only is it important for us to have knowledge and confidence when it comes to our finances, it’s also important to start educating future generations early.
Women also start off at a financial disadvantage
Hello, wage gap, unpaid maternity leave, and holding the majority of student loan debt.
Facts that make us want to scream into a pillow:
- One in five women falls into poverty because of divorce.
- Around one in three women who own a home and have children lose the house after divorce.
- Three in four divorced mothers don’t receive full payment of child support.
Re: abusive relationships
- Financial abuse happens in around 98% of domestic violence cases.
- 59% of people’s credit is negatively impacted by their abuser.
Re: student loan debt
- Women carry 58% of all student loan debt.
- On average, women’s loan total is 9.6% higher than men’s.
- On average, it will take women two years longer than men to pay off their student loans.
Re: retirement, investments, and rainy day funds
- Women tend to outlive men, so our retirement funds need to last longer—yet the wage gap means that on average, women make less than their male counterparts, so we have less money to work with.
- Many (but not all) women prioritize things like family or paying off debt over saving for retirement.
- Millennial men are more likely to have rainy day funds and non-retirement investments than millennial women. (P.S. it’s totally a myth that you need a lot of money to start investing.) (P.P.S. women are better at investing than men. It’s science, baby.)
It’s OK if you feel overwhelmed by all of this—because it’s definitely overwhelming! The patriarchy sucks. But don’t let it prevent you from taking steps to improve your financial literacy. Here are a few resources we like to help you get started:
Financial Feminist Podcast
Finance Is Cool
Brown Ambition Podcast
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