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women and financial literacy

Women and Financial Literacy

In more than one third of American marriages, the woman out-earns her husband. And although that’s a long way off from an even 50%, it’s a definite improvement on what the numbers looked like in 1987, when less than a quarter of women were the primary breadwinners in their families.

The bad news — women feel no more prepared to make wise financial decisions today than they did two years ago or even a decade ago, according to a recent study. Nor has their financial literacy (understanding of financial and insurance products) improved. Not surprisingly, the measure of women’s confidence in their ability to attain their financial goals has not improved over that 10-year span either, according to the disheartening findings.

What’s more, women still tend to pass the buck on important money matters, such as investing and retirement. While that may have to do with the remnants of traditional gender roles in a household, it could also be an indication that financial literacy (or lack thereof) is the cause.

According to studies, women are falling far behind men in financial literacy. Not that men are all that much more impressive either. Men apparently don’t know much about the topic either.

A study by the Global Financial Literacy Excellence Center shows strikingly similar gender differences in financial literacy across countries. When asked to answer questions that measure knowledge of basic financial concepts, women are less likely than men to answer correctly and more likely to indicate that they do not know the answer.

In addition, women give themselves lower scores on financial literacy self-assessments than men. Both young and old women show low levels of financial literacy. Moreover, women for whom financial knowledge is likely to be very important, for example widows or single women, also know little about concepts relevant for day-to-day financial decisions.

Even women in favorable economic conditions are less financially knowledgeable than men. The gender differences are present for very basic as well as more advanced measures of financial literacy and financial sophistication. This is important because financial literacy has been linked to economic behavior, including retirement planning and wealth accumulation.

Women live longer than men and are likely to spend time in widowhood. As a result, improving women’s financial literacy is key to helping them prepare for retirement and promoting their financial security.


Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. Member FINRA & SIPC

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