You’ve heard of the gender pay gap, but did you know there’s a gender gap in financial literacy too?
Financial literacy, or the ability to understand your finances and manage your money effectively, is an essential skill for everyone. Learning how to track, budget, save and invest money has the power to set you up for a financially fit (and secure) future.
Recent data shows that rates of financial literacy in Australia are declining, with women and girls disproportionately impacted. In Australia, the average man will score 8% higher on a financial literacy test than a woman.
The number of women with low financial literacy is more than double the number of men. There are three times as many men than women with high financial literacy.
The gender financial literacy gap presents yet another significant barrier to women’s economic security.
So, what causes it?
The financial literacy gap is driven by a multitude of things, including the gender pay gap, and outdated gender norms surrounding money management.
The gap starts to form when children start learning about chores. Data shows that girls get less pocket money than boys, and start picking up unpaid domestic labour when they are young. Research also shows that fathers are more likely to teach their sons about wealth creation and investment, while mothers are more likely to teach their daughters about saving and budgeting.
That, when combined with the fact that the gender pay gap will cost women over 1 million dollars in their lifetime, sets half the population up to be at risk of economic insecurity.
Why does it matter?
People with low financial literacy are much more likely to experience economic insecurity throughout their lives.
Economic stability is essential for women’s access to safe and secure housing. Financial insecurity can often prevent women who are experiencing domestic violence from being able to leave their abusive partners.
Women are also more likely to retire in poverty than men, with 25% less superannuation.
How can you improve your financial literacy?
Knowledge is power.
There are so many barriers that stand between women and economic security, and those challenges compound at the intersections of race, ability and class. Educating yourself and learning good money habits is one of the most important tools you can give yourself to navigate those challenges and set yourself up for a stable future.
There is always more to learn about managing your finances. Try talking to your mates, reading books and listening to podcasts to start learning more about money.
If you have no idea where to start, we recommend talking to a financial counsellor or planner to get some professional advice.
The more women feel empowered and confident to manage their money, the smaller the financial literacy gap will get.
Want to know more? When it comes to managing money, there's always more to learn. Check out these resources to help you get started.
