Women Narrowing Financial Literacy Gap

The financial education provider recently released “Gender Gap in Financial Literacy,” which suggests women have made progress in four distinct areas of financial literacy—cash flow, debt management, retirement planning and investment—compared with their male counterparts. Between 2012 to 2013, 0.9% more women said they had a handle of their cash flow versus 0.1% more men; 1% more women said they were comfortable with their handling of debt issues versus 1.3% fewer men; 3.6% more women said they were on target for retirement versus no change for men; and 3.3% more women said they have done a portfolio fee analysis versus 1.9% fewer men.

Retirement planning is the top priority for both men and women, according to the survey. For women, second and third priorities are managing cash flow and getting out of debt; men consider investing to be a second priority, followed by managing cash flow.

The study found the gender gap in financial literacy was more pronounced among those with incomes greater than $150,000. The same result was also seen with lower incomes, specifically between $20,000 and $35,000. But, the gender gap is closing among those who earned $60,000 to $100,000.

The study finds that financial wellness programs could be a key factor in narrowing the financial literacy gender gap even further. Study figures show that between 2011 and 2013, the percentage of women participating in financial wellness programs has risen from 52% to 63%, with female employees now making up more than six out of 10 program participants.

“I think society is beginning to realize the severity of challenges that women face in achieving long-term financial security, but they are still so significant that women have to do even more to overcome them,” says Davidson, who is based in El Segundo, California.

Greg Ward, director of Financial Finesse’s think tank, agrees, adding, “Women need to save considerably more and invest more wisely and aggressively than men because of these challenges.”

The study finds that financial wellness programs could be a key factor in narrowing the financial literacy gender gap even further. Study figures show that between 2011 and 2013, the percentage of women participating in financial wellness programs has risen from 52% to 63%, with female employees now making up more than six out of 10 program participants.

The study concludes that while there has been progress in closing the gender gap with financial literacy, further efforts need to continue.

An executive summary of the study can be found here. A video covering questions and answers about the study can be found here.