In a Nutshell
Women in the U.S. aren’t feeling optimistic about their finances. The gender pay gap explains part of what’s getting them down, but it doesn’t capture the full picture. A new Credit Karma survey finds stark differences in women’s and men’s everyday interactions with money — revealing that women live with more debt, less savings, and less confidence in their ability to retire comfortably overall.Women are twice as likely as men to associate negative emotions with their finances.
In a Credit Karma/Qualtrics survey of 1,048 U.S. adults, almost 40% of women said they feel “overwhelmed” when thinking about their finances and 31% feel “discouraged.” Meanwhile, only 9% of women reported feeling “empowered” and only 8% said they felt “excited.”
In contrast, men were more likely than women to associate positive feelings with finances across the board. For example, men most frequently reported feeling “in control” of their finances (42%) or “hopeful” (33%).
Why the discrepancy? The usual suspects are accounted for: According to our survey, women still earn less overall than men and some feel like they’re paid less than their male counterparts. But our survey also shed light on a few new culprits beyond the gender pay gap (or perhaps caused by it) that might explain why many women are feeling down about money. (Learn more about our methodology.)
Key findings
| 51% of female respondents said their income feels somewhat or very low, while only 31% of male respondents felt that way. |
| Only 28% of women surveyed believe they’ll have enough money to retire comfortably, compared to a majority (53%) of men. |
| Twice as many women as men (38% vs. 17%) have less than $400 in total savings, while twice as many men as women (37% vs. 18%) have $50,000 or more in total savings. |
| 60% of women who work or have worked more than one job reported doing so to make ends meet, compared to just 32% of men. |
| About half of women (49%) have just $100 or less in discretionary income each month, compared to only 24% of men. In contrast, about 1 in 3 men has more than $900 in discretionary income each month, compared to just 13% of women. |
| More than two-thirds of women with debt (68%) said they feel overwhelmed by debt with some frequency, compared to only half of men. |
Why are women stressed about money?
We know women are still earning less than men, but our survey reveals to what extent it might be affecting their ability to save for emergencies, live a comfortable life and plan for the future.
For many women, money doesn’t provide a sense of security
Only 36% of women from the survey said they make enough money to live comfortably, while 51% said their income feels somewhat or very low. On the flip side, 60% of men said they make a comfortable living, while only 31% said their income feels somewhat or very low.
That’s not surprising, since women in the U.S. who work full time, year-round earn 20% less than their male counterparts, according to a 2017 report from the National Women’s Law Center.
But it doesn’t end there. According to the Credit Karma survey, 60% of women who work or have worked more than one job reported doing so to make ends meet, compared to just 32% of men.
With women struggling to earn enough just to cover basic expenses, they likely don’t have much left over to save. In fact, twice as many women as men (38% vs. 17%) surveyed have less than $400 in total savings, while twice as many men as women (37% vs. 18%) have $50,000 or more in total savings.
And with less money in the bank, it’s more difficult to cover even small unforeseen expenses, let alone life’s bigger emergencies, increasing the financial strain women and their families feel.
Less income means less agency to deal with debt
Not only do lower salaries make it more difficult for women to save, they also make it more difficult for women to pay down debt.
Women, today, earn 57% of bachelor’s degrees in the United States compared to the 43% they earned in 1970, according to the National Center for Education Statistics. But women are accumulating more debt than men in order to earn their degrees and taking longer to repay their loans.
According to our survey, more women (21%) than men (14%) reported having student loan debt. And 37% of those women owe more than $20,000, while only 23% of men with student loans owe that much.
Women are also more likely than men (33% vs. 23%) to pay only the minimum amount due on their credit card bills, suggesting they may be spending more than they can comfortably afford.
And the debt that women are accumulating is more likely to be a source of stress than it is for men — 68% of women who have debt reported feeling overwhelmed by it with some frequency, while only half of men said they feel that way. At the same time, 27% of men with debt said they never feel overwhelmed, while only 12% of women reported feeling that way.
Women aren’t planning for the future
To make matters worse, women save and invest differently than men, making them less prepared for the future.
Our survey suggests that men are more likely to “pay” themselves first and save a set amount of money each month, while women are more likely to save whatever’s left over after expenses, which as we’ve seen can be very little.
According to our survey:
- Men are more likely than women (42% vs. 24%) to put extra money they have into savings, while women are more likely than men (42% vs. 29%) to use extra money to pay bills or reduce debt.
- More men (40%) than women (22%) have invested money in the stock market.
And according to the Ellevest 2018 Money Census, the investment gap between men and women could cost a woman earning $50,000 a year hundreds of thousands of dollars over her lifetime.
But that doesn’t explain why men and women behave so differently around money.
Because women earn less than men, it’s reasonable to assume they feel like they can’t afford to save and invest. But our survey suggests a lack of financial education may also be to blame. Of the women surveyed by Credit Karma, 35% said they don’t seek information about personal finance, compared to 84% of men who do seek education around the topic.
Unfortunately, these habits put women at a disadvantage as they approach retirement, which is especially troublesome, since they have a longer life expectancy than men — meaning women’s money needs to last longer.
In fact, only 28% of the women in our survey said they’ll have enough money to retire comfortably, while more than half (53%) of the men surveyed said they will.
Tips to improve your financial outlook
While the income gap between men and women won’t go away overnight, there are things women can do now to help them feel more hopeful about their financial situations.
- Leverage workplace resources. Many businesses and nonprofit organizations offer some type of financial education program to their employees. But according to the 2015 Fidelity Investments Money FIT Women Study, 65% of women who are offered retirement advice at work don’t take advantage of it.
- Pay yourself first. Setting aside money to save or invest before you pay your bills each month may seem impossible if you’re struggling to make ends meet. But consistently saving as much as you can, even if it’s just a few dollars, can have a positive impact on your ability to handle an unforeseen expense and prepare for the future.
- Seek out information. It’s clear from the results of the Credit Karma survey that many women don’t proactively seek financial education resources. But that’s a mistake — sound financial advice can help you make smart decisions that could improve your financial health.
- Continue your education. This might seem counterintuitive given the income gap that persists even after earning a degree. But individuals with a college degree typically earn more than those without one. The key is to manage the cost of your education so that you’re not saddled with unwieldy student loan debt when you graduate. Consider looking for grants and scholarships, or opting for lower-cost community colleges or public universities instead of private colleges. And if you’re employed, you may be able to get your employer to pick up all or part of the tab. Many employers offer tuition reimbursement as a benefit of employment.
Methodology
On behalf of Credit Karma, Qualtrics conducted an online survey in August 2018 of 1,048 adults in the U.S. matched to census data on age, gender and income. All percentages in this article are rounded to the nearest whole percent.