Have you ever wondered how men and women compare financially and credit-wise? Men have traditionally been the breadwinners; women have traditionally made the spending decisions when it comes to household purchases, but not overall financial decisions. While the pay gap still exists (women earn 77% of the pay of their male co-workers), 33% of American women are now the primary breadwinners in their households. This number has quadrupled since 1960. How has the shift in earnings affected women’s relationship with money and credit?
A study by realsimple.com found in general that women still tend to be insecure about the subject of money. Investments come with a myriad of terms and acronyms, and informative investment articles are generally not geared towards women. Men can savor the jargon and feel a sense of pride when they master it, but women seem to shut down when faced with the same information. In addition, women are still relying too heavily on others for financial know-how. Few people now in their 40s or older had role model mothers who were the key financial decision-makers in their homes. Even younger women have been raised with the idea that they would be secondary earners and their partners would be responsible for investment decisions. In addition to the tendency to be overwhelmed by investment information, women tend to be risk-adverse. They are less likely to be caught up in get-rich schemes, but since all investment involves risk, they are less willing to invest money at all. Since women so often earn less than men, the biggest reason women save less and take fewer chances with investments could be that they don’t have enough money to put away in the first place. Even among women who do invest, there is still a considerable gap in habits. A 2012-2013 survey by Prudential involving 1400 women and 635 men found that women lag far behind men when it comes to investment habits and knowledge.
A 2010 survey showed that median earnings for women in the U.S. were $36,931 vs. $47,715 for men. Unfortunately, this pay gap (expressed as a percentage) has not decreased since 2009. American Progress released survey regarding gender and pay gap and found:
FinancialFinesses.com conducts an annual gender gap surveys regarding money management. Their July 2013 report found:
One of the 3 major credit bureaus in the U.S., Experian, did an analysis based on gender-specific data and found the following points regarding the credit scores and credit histories of men vs. women:
Bankrate reports that up to 50% of women and 35% of men consider a credit report to have an impact while trying to find a date. 6% of the respondents agreed that sharing each other’s credit score is necessary within the first few dates. 74% say it is acceptable for a couple not to share each other’s credit score until moths later of going out, or even after they are engaged.
Unfortunately, it’s the uncommon American woman who invests financially in her future, even if she is the head of her household. In addition to lack of investment, most women don’t have enough savings to fall back on in times of hardships, though they do show a tendency towards bargain hunting. Gender inequality still exists in the pay rates of American workers, which may be part of the reason for the low investment/saving rate. However, despite the lack of saving and investments, women are better at managing their credit ratings, and consider their partner’s credit when making decisions regarding relationships.
Should you hire a financial advisor? Here you can get all of your questions about…
While paying off collections generally won’t improve your credit score, newer scoring models like FICO…
If you’re wondering “how much will a secured credit card raise my score,” it won’t…
Learn what credit mix is and how it affects your credit score, as well as…
Discover the best finance podcasts to learn everything from how to create a budget to…
Do utility bills affect your credit score? Get the facts about how accounts like gas…