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The Financial Differences Between Men & Women

The Financial Differences Between Men & Women

Gender & Finances

As with other aspects of life, women and men differ in their views. Not surprisingly, they also have different approaches to financial planning. Read on for more information on the distinct ways women and men differ when it comes to finances and how understanding these differences may make it easier to agree upon a financial plan.

Financial Literacy

Women and men have varying levels of knowledge when it comes to financial concepts. This could be, in part, because gender stereotypes position men as financial experts or because knowledge of financial matters can be attributed to the time they have to focus on financial education. In more than half (54%) of homes where both parents work full-time, women do more to manage children’s schedules and activities1, leaving less time to focus on financial wellness topics.

In a survey of plan participants OneAmerica conducted in 2017, men perceived themselves as more knowledgeable than women did on a variety of financial topics. Across gender lines, people felt most knowledgeable about budgeting, credit scores and monitoring and debt management.  

The survey results also indicate that although women have less perceived financial knowledge compared to men, they have a much higher receptivity for education and assistance.

Varying Priorities

Men and women also reported varying financial priorities. Overall, women show more focus on immediate needs versus retirement and also indicate they have higher financial stress.

Prioritization of short-term expenses by women may be due to the ongoing disparity between the earnings of men and women. According to the U.S. Bureau of Labor Statistics in Q1 2018, women who usually worked full-time had median weekly earnings of $783 or 81% of the $965 median for men. This earning differential may be the reason women ranked not having enough money to pay monthly bills as their top financial concern, whereas men indicated their top financial concern was not having enough money for retirement.

The survey also noted that student loan debt is impacting women more than men, as women are more likely to be paying on a student loan for themselves or a member of their family. Women are also more likely than men to indicate that student loans are having an impact on their ability to prepare for retirement, as student loan debt is further increasing the financial demands on their paycheck.

Working with a Financial Professional

Men are more likely to work with a financial professional (such as an investment advisor) than are women, according to the 2017 survey.

Men and women have different reasons why they don’t work with a financial advisor. Men indicate they don’t work with a financial advisor because they don’t believe they need help setting goals or investing.  Women, on the other hand, say they are concerned about the cost and feel they don’t have enough wealth to work with a financial advisor.

Preparing for Retirement

The survey also identified a disparity in retirement preparation between genders. Men are more likely to have high ($100,000+) retirement plan balances, with half of the women surveyed reporting a retirement plan balance of less than $25,000. This retirement savings difference is most likely caused by women focusing more on immediate needs rather than retirement preparation. This is a significant difference because, on average, women are expected to live five years longer than men, according to the National Center for Health Statistics.

Understanding the Differences

As you think about your financial priorities and handle family finances, keep in mind how your preferences may differ. Use this information to grow in your knowledge of financial topics and better prepare for the future. Contact a financial professional to help your family develop a comprehensive approach to its financial strategy.

 

Note:

1 Pew Research Center, Raising Kids and Running Household: How Working Parents Share the Load, 2015

Group annuity contracts are issued by American United Life Insurance Company® (AUL) and registered variable annuity products are distributed by OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRA, SIPC, One American Square, Indianapolis, IN 46282, 1-877-285-3863 McCready and Keene, Inc. and OneAmerica Retirement Services LLC provide administrative and recordkeeping services and are not brokers/dealers or investment advisors. Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary or investment advice.

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