EL SEGUNDO, Calif. (7/9/12)--The gender gap in financial literacy is widening, with women lagging behind men in two areas, according to new research. That sounds like an opportunity for credit unions to update or broaden their financial education strategies to assist in educating their members.
A study of employee financial issues by El Segundo, Calif.-based Financial Finesse, which provides workplace financial wellness programs, discovered two pervasive areas critical to women's ability to achieve financial security:
Basic money management, the foundation of all planning. Roughly 43% of women surveyed reported they have an emergency fund to cover unexpected expenses, while 63% of men surveyed do. Fifty-two percent of women (compared with 71% of men) said they were comfortable with the amount of non-mortgage debt they had.
Investing knowledge and confidence, crucial to women's ability to build their wealth. Roughly 37% of women surveyed (compared with 57% of men) said they have taken a risk-tolerance assessment and are aware of their conservative, moderate, or aggressive investment strategy. And 25% of women reported rebalancing their investment accounts to keep their asset allocation on track, while 49% of men reported doing so.
The gap was most narrow in two areas that tend to be more proactive: retirement planning, with women showing virtual equality with men in retirement plan participation, and estate planning, an area in which women tap their natural skills, said Liz Davidson, CEO and founder of Financial Finesse.
The gap between the genders is widening in nearly every area of financial planning. "Women should actually be the ones spending more time and putting more focus on improving their finances because they face so many more challenges than men in financial planning," Davidson added. Women live about five years longer than men on average, and 90% of women will be solely responsible for their finances at some point in their lives. They also make less money over their lifetime.
Courtney Moran, executive director of the Texas Credit Union Foundation, said she is concerned about the data related to saving emergency funds. "Having adequate savings to cover unexpected emergencies, as well as plan for short- and long-term goals, is essential to achieving financial security and building wealth," she told the Texas Credit Union League's LoneStar Leaguer
(July 6). "We must simply get in the habit of paying ourselves first," she added.
Sharon Moore, CEO of $252 million asset City CU, Dallas, told the league her credit union is helping consumers improve their personal financial positions. Since 2007, it has hosted Dollars & Sense on WFAA's "Good Morning Texas" program, where the credit union provides financial advice and information to a broad audience.
About the gender gap study's findings, Moore said, "I see this as a real opportunity for the credit union community to intensify our efforts to ensure everyone in our communities has access and the opportunity to learn important financial information that will help them build wealth and achieve financial security."