Women, financial literacy and potential money problems
With the challenges facing women of all ages, financial education may be more important than ever.
Statistically, women live longer than men do. Younger women are more likely to participate in the labor market than in the past. Women’s enrollment in institutes of higher learning is outpacing men. With these realities, many women face potential money problems. There is a greater need for childcare, and it can be very expensive. In addition, student loan debt continues to grow and many young people have more credit card debt than savings. As women tend to live longer, retirement needs are even more important, especially health care costs. With the challenges facing women of all ages, financial education may be more important than ever.
While a gender gap in pay between men and women still exists, there is another gap that may be as (or more) important. A working paper discusses important insights concerning women and financial literacy, accessible online at the Global Financial Literacy Excellence Center (GFLEC) website and authored by Tabea Bucher-Koenen, Annamaria Lusardi, Rob Alessie and Maarten van Rooij. If you are interested in this topic and the existence of a gender difference when it comes to financial literacy, I highly recommend that you read the paper. However, I will point out from their concluding remarks one very good piece of news. To the extent that women need to become more financially literate, especially in light the realities stated above, they recognize this need.
How do women manage their day-to-day affairs, the needs of their family, their debt and their future? What financial decisions do they have to make on their own or together with a partner? How will they manage their money when they are older, retired or widowed? Consult these two articles about financial well-being, part 1 and part 2 for some direction. In addition, seek out financial education close to where you live and enroll in a class. The GFLEC working paper points out that there are increasing studies on the effect of financial literacy and financial decision making. A person’s retirement planning, for example, is affected by the amount of financial knowledge that they possess. The proper management of credit and debt can help a person avoid costly financial mistakes and a basic understanding of investing could be more important than ever as work-place retirement programs continue to shift more responsibility to the employees through defined contribution pension plans.
It has been said that the first step to solving a problem is to recognize that one exists. One could also conclude that the best way to avoid a money problem is to recognize that it will exist without proper planning and goals. Michigan State University Extension offers a variety of money management programs throughout the state of Michigan. Most of these programs are free or at a very low cost to attend. In addition, you can find answers to many of your money questions at mimoneyhealth.org.