Singer Martina McBride may allude to women’s financial struggles in her song lyrics:
“This one’s for all you girls about twenty-five
In little apartments, just tryin’ to get by
Livin’ on, on dreams and Spaghetti-o’s
Wonderin’ where your life is gonna go...”
The pop-culture reference suggests that for many young women, financial challenges exist given the frugal living accommodations and inexpensive meal choices McBride describes.
A further implication may be that dreams and wondering are substitutes for informed actions promoting financial success.
Research findings this week show that women are an economic force; their work and financial contributions an important component to family budgets and the economy at large.
Data also reveals, however, that women face financial challenges. Although many work, women still question their financial security and money confidence.
‘The most effective way to do it, is to do it.’—Amelia Earhart
First, an examination of women’s work situations and economic impact…
“There were 127.1 million working-age women… in the U.S. in 2013—72.7 million were in the labor force,” says the U.S. Department of Labor. And, it is anticipated that between 2012 and 2022 the number of women in the ranks of the civilian labor force will grow by 5.45%.
Median weekly earnings for all women in 2013 was $706.
Further insight from The White House Blog: “5 Things You Need to Know About Women and the Economy.” They are:
1. Women’s employment increases and is less cyclical in nature than men’s.
2. Women’s unemployment declines across multiple measures.
3. Job gains for women are largely in education and health services, professional and business services, and leisure and hospitality.
4. Women’s employment growth in manufacturing was very strong in August.
5. Younger women remain in school, offsetting labor force participation declines.
Learn “How Working Women Help the Economy,” per The New York Times. Here noted, women have flooded the workforce since 1979, the number of full-time working women “surged to 40.7% from 28.6%.”
Had this trend remained stagnant the last 30 years, “the economy would be about 11% smaller, translating into $1.7 trillion in lost economic output in 2012.”
This is of great benefit, as “The ultimate effects are richer families and a larger economy.”
‘Success breeds confidence.’—Beryl Markham, Kenyan aviator
Does women’s growing participation in the workforce breed confidence?
Bankrate’s September 2014 Financial Security Index Charts indicate women may not be so confident. Considering job security, 18% of women “feel more secure” than a year ago, compared to 33% of men.
Thirty-nine percent of women “were less comfortable” with amounts of money in savings than the year prior vs. 31% of men, and only 18% of women express greater comfort with debt levels, compared to 26% of men.
And, 34% of men think their net worth is higher, while 21% of women feel this is the case. Finally, “30% of women said their overall situation is worse, compared with 22% of men.”
Another glimpse of women’s perception of financial security is available in Prudential’s 2014-2015 study, “Financial Experience & Behaviors Among Women.” Key observations:
Despite women’s sense they are more financially secure since 2010, “few women feel better prepared to make smart financial decisions,” with main obstacles including “money, time, (and) direction.”
An example of an ill-advised financial choice women make is identified by a Nationwide survey. “More than four in five women elected to take their Social Security early” and “women who don’t maximize their Social Security benefits can miss out on hundreds of thousands of dollars.”
Sometimes early withdrawals are the result of forced early retirement, but also “some mistakenly believe taking it earlier will result in more money over the long run.”
‘Never give up, for that is just the place and time that the tide will turn.’—Harriet Beecher Stowe
What might financial service providers do to help? What do women “dream about” with regard to financial matters?
One detriment identified for women is that “even as girls, they’re running behind on being prepared financially,” says benefitspro.com reporting on a T. Rowe Price survey. “Parents prepare boys better than girls.”
Fifty-eight percent of boys say parents discuss financial goals vs. 50% of girls. And, 80% of parents say their boys understand “the value of a dollar,” compared to 69% of girls’ parents.
Consequently, “45% of boys say they are extremely smart about money, while only 38% of girls feel that way.”
“Despite a reduced sense of urgency about their financial goals, women’s feelings about how confident they are to meet these goals remain static over the past decade,” says the Prudential study.
Health-care expenses, college costs, and saving for retirement are concerns.
What do women want from the financial services sector? “Simplicity, good intentions, strong ethics,” says Prudential.
Indeed, “advice can improve preparedness.” But only 31% of women currently use a financial professional, down from 2008’s 48%.
Still, women considering financial needs identify advisors as a primary resource—20%--compared to family and friends as a resource (17%) or spouses/partners (14%).
Women are already an economic force, for households and the nation.
But “Wonderin’…where life is gonna go” is not a good solution for women who seek financial success.
Do women represent an untapped economic force for the financial products and services you provide?
Help women achieve their fiscal dreams. Give them greater confidence to reach financial security.
LORA BRAY is an information research analyst for CUNA’s economics and statistics department. Follow her on Twitter via @Bray_Lora, and visit the CUNA blog, “The Research Roundup: Economic Perspectives.”