Why Gen Z Women Have Less Savings Than Men — And How To Change That

Gen Z takes many paths. They are the most ethnically diverse generation known to value equity and inclusion in the workplace. They are also a tech-savvy and skilled workforce, born into a world already saturated with sophisticated digital technology and hooked up to the endless scrolls of social media. When it comes to their financial habits, however, Gen Z is still very much in the early stages of learning.

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These people are quite young — between 18 and 25 for adults — but we can already see some Gen Z money trends, one of which is worrying: Gen Z women are saving less than their male counterparts.

According to a new Bank of America report that focuses on Gen Z spending habits, only 38% of Gen Z women have enough savings for three months for emergencies, compared to 48% of Gen Z men. This is not the only worrying discrepancy. According to the report, Gen Z women feel less equipped to handle day-to-day expenses than men (63% vs. 76%) and less able to save for retirement than their male counterparts (37% vs. 49%).

So why are Gen Z women behind Gen Z men when it comes to good financial habits?

The gender gap amid inflation

“Many Gen Z are just starting out with entry-level salaries in the workforce while facing rising rents and the cost of living as inflation continues to hurt the U.S. economy,” said Lisa Fischer, Mission Lane’s chief growth and lending officer. “In addition, nationally, women under 30 who work full-time earn about 93 cents on the dollar compared to their male counterparts, according to an analysis by Census Bureau Data’s Pew Research Center.”

How do women deal with the gender pay gap? It’s discouraging, but progress is being made thanks to the hard work of women.

“To close the pay gap, women leaders and their male allies have an opportunity to advocate for women’s entry into the labor market to help them build their careers and create a fair opportunity for them to succeed,” Fischer said.

“In addition, employers and financial service providers can provide financial literacy resources to offer advice on best practices for saving, investing and budgeting effectively in a volatile economy. Employers can also support by offering benefits that align with Gen Z’s most important and costly causes and goals, such as: B. mental health and wellness, fitness and transportation.”

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Lack of financial literacy

“Minimal financial literacy has a massive impact on women’s lives as they try harder, take longer to pay off their debts, and often choose to accumulate very little,” said Elena Jones, credit and personal finance expert and founder by FinanceJar.

“Because of this lack of sufficient academic achievement, understanding financial records, credit or debit card contracts, and other financial data is challenging. Women who lack money management skills face severe consequences such as: B. massive payment delays, non-acceptance of college loans, and difficulties in managing income, taxes, and assets.”

Like everyone else, Gen Z women need to take financial literacy into their own hands. You can get enough education simply by reading books on the subject (some are fairly light but effective reading) and listening to personal finance podcasts. The next and most powerful step would be to meet with a trusted financial advisor to organize your finances and set them up for success.

talk about it

When you’re not in the best of financial shape or don’t reach your financial goals, it’s easy to fall into a shame spiral. Resist and speak!

“Talk about money to your mothers, daughters, sisters, grandmothers and girlfriends,” said Stacy J. Miller, CFP, Partner, VP, Wealth Advisor at Bright Investments, LLC. “People find it taboo to talk about finance, but pulling back the curtains can help the next generation make better decisions. For example, understanding how your salary compares to others will help close the gender pay gap.”

Write everything down

“In conclusion, my biggest piece of advice for young people who want to build a strong financial base and save more in this uncertain economic environment is to write everything down,” Fischer said.

“Whether you’re doodling in a notebook or typing out an organized list, a detailed record helps you visualize your cash flow and save when needed. Once you have a picture of your spending, you can set savings goals. Using tools to track monthly expenses helps individuals keep tabs on rising costs and spend within the “necessity” and “luxury” spending categories. Staying organized and aware of your financial situation is key to building financial independence.”

Challenge gender education and messages

“As we ask how we can change this pattern in young women, we must first examine the role that gender identity plays in managing our finances,” said Kimberly JC Enders, CFP, CWS, CFPA, owner of Enders Wealth Management.

“If a woman’s upbringing says that the path to happiness is to find love and the secret to finding love is to be beautiful, and buying all those things helps us to be beautiful — that is a subliminal message about how to spend her money. It is precisely this mindset that needs to be brought to light. You don’t buy beauty in a store, it comes from within. And if that shift in thinking can happen, there can be an increase in saving habits.”

That’s not to say you can’t buy and enjoy beauty products or procedures. However check why spending that money and focusing your budget on what makes you truly happy is a big step on the road to financial success.

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