A new survey shows an interesting juxtaposition between how men and women prioritize financial goals: Men value saving for retirement most, while supporting their family ranks fourth. Women value supporting their family most, and rank saving for retirement fourth.
Building an emergency fund (29%) and sticking to a budget (26%) also outranked saving for retirement for women in the survey.
That’s among the interesting findings from the first-of-its-kind Ellevest Women’s Financial Health Index(“EWFHI”) and the second annual Ellevest Financial Wellness Survey, released recently from New York City-based Ellevest, a wealthtech company built by women for women.
“We have long known that money is women’s No. 1 source of stress. This issue has only become more acute as women’s financial health has deteriorated.”
Dr. Kate Sullivan, Ellevest
Another key finding? Money is women’s No. 1 source of stress. More than half (59%) of women worry about money at least once a week. A whopping 43% of women actively worry about money at least once a day. In both instances, they’re out-worrying men (55% and 36%, respectively).
“We have long known that money is women’s No. 1 source of stress. This issue has only become more acute as women’s financial health has deteriorated. In fact, the EWFHI shows that women’s financial health is currently the worst it’s been in the last five years,” said Ellevest Head Data Scientist Dr. Kate Sullivan, who constructed the proprietary index.
“Women’s financial health worsened during the pandemic, primarily due to employment levels, but it rebounded relatively quickly as the labor market recovered and access to paid family leave began to expand,” Sullivan continued. “Since then, however, it’s been driven further down, as high inflation impacts her spending power and the overturning of Roe v. Wade clouds her economic future. No wonder consumer confidence has been falling, even as women return to the workforce.”
Ellevest found that men (30%) were more than twice as likely as women (14%) to say they feel financially prepared for a recession.
Another interesting finding from the research? Women are less likely to invest, but when they do they keep their cool. The study found women are roughly half as likely to invest as men are, and just 30% of women have met with a financial advisor or planner.
That said, when women do invest, they make many of the right moves. Only 38% of women reported feeling concerned about market volatility vs. 58% of men—which explains why more men than women have paused their retirement contributions and withdrawn money from the stock market.
Women are also more worried about climate change than men. More than six in 10 (62%) of women surveyed cited climate change as one of their top financial concerns, more than retirement planning (51%), credit card debt (46%), the stock market (38%), and child care costs (30%).
The index also revealed that women hold an outsized share of student loan debt. Annual reports from the American Association of University Women (AAUW) were compiled to obtain an estimate of student debt by gender at graduation. The analysis found women held approximately 55% of total student debt and owe approximately 16% more than men at graduation. On average, men owe $18,880 in student debt whereas women owe $22,000 (AAUW, 2022). Forty-four percent of women undergraduates take out student loans, compared to 39% of men.
“Our goal is to comprehensively capture the state of women’s financial health, through both survey insights and quantifiable data from our new Ellevest Women’s Financial Health Index,” said Sallie Krawcheck, CEO and Co-Founder of Ellevest. “The truth is that it’s difficult to change what you don’t measure. This work places gender-based financial inequities squarely in focus, as well as shows a path forward.”
The Ellevest Women’s Financial Health Index is constructed from a number of quantifiable factors that impact women’s financial health; these include the gender pay gap, inflation, student loan debt, paid family leave, reproductive rights, women in leadership, consumer confidence and student loan debt. It also includes proprietary insights from Ellevest’s business, including trends in recurring deposits by women and share of investments going into impact investing.
“We’ve seen again and again that taking stock of your financial health—and then taking concrete actions to improve it—can turn money from a source of stress to a source of strength for women,” Krawcheck said.
SEE ALSO:
• ‘Perfect Storm’ Causing Lower Retirement Confidence for Certain Women
• What’s the Top (Current) Financial Concern for Women?
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
