The Harvard Business Review

Harvard Business Review published a study which indicated that ninety-three percent of qualified women who left, now want to return to their careers. However, they find it very difficult which makes it more challenging to advance their knowledge and career. Career development is very important for women because they need it to be financially independent.

It has actually been determined that men make more money than their female counterparts. Women, in 2018, seemed to earn eighty-five percent of what was earned by men, in accordance with Pew Research Center. It is the case with most of the countries in the world.

If less money is made by women than men, they won’t have sufficient money which means that it is even more significant to manage it. They have less money for expenses and as a result, they are able to save less than men. A survey conducted by CNBC seemed to indicate that women approaching their retirement had $81,300 on average in their retirement savings and $118,400 was the amount owned by men in their savings. The problem is not concerned with the fact that females are not saving – it is quite the opposite. Fidelity conducted research in which it was indicated that women save a larger percentage of money compared to men. The issue is that with less income, the saved amount is less.

Understanding finance seems to be a very tough and daunting task and finance itself can be intimidating. However, once a person gets to know the depths and practicality of finance, it would be hard to resist it. For starters, finances should be organized and a realistic look should be taken towards them. A budget and net worth statement should be created and vulnerable areas should be determined. For instance, it should be identified where a person is spending more and where is spending less. Moving on, long-term and short-term objectives should be created and it must be analyzed whether they are feasible with the current situation or not. And if not, spending should be decreased or a part-time job should be taken for making extra income. Women whose spouses are financial managers should tell them that they need to be more involved and engaged in the financial decisions of the family.

A review of study from over recent 6 years indicates a gender gap in both investment and financial understanding, in accordance with an article published by Gary Mottola of FINRA or Financial Industry Regulatory Authority. He concluded in his article that females score consistently lower than males on the measures of financial literacy, and this gap might adversely affect the financial wellbeing of women. This study was actually based on the information from NFCS or National Financial Capability Study. Five questions on financial literacy were posed by it and answering the effectiveness of females versus males was tabulated by it.

It was indicated by results that both older and millennial females underperformed males in answering the basic questions. It was also found by the study that women are likely to respond with “don’t know” to the basic questions.

Researchers, in a similar which was based on the data of NCFS, found a gap in investor literacy. It means that females were determined to be less capable of answering questions testing their awareness and knowledge regarding investments. Still, another research on the basis of NFCS data indicated married women are less likely to determine themselves as the most knowledgeable persons in their families. One a small percentage of women believed in themselves to have information about finance.

A possible explanation for the investment and financial literacy gap seems to come from study results indicating that males are likely to be offered education in finance. A reason this takes place is that males are more likely to be full-time employed and such education is normally offered in the workplace. Two troubling findings are actually articulated by Mottola: “The gender gap in the literacy of finance over a period of six-years has persisted.” And the fact that “these lower financial literacy levels among females might impede their capability of managing accumulating assets, and securing a fruitful financial future.”

It is believed that both women and men could benefit from recognizing that such gaps in literacy persist, and from utilizing the resources of financial education for closing the gaps. When people come to be aware of these gaps, they will make efforts in overcoming the hurdles which they encounter in managing finances. When people are ignorant, they are unable to make progress and the very first step to decreasing these literacy gaps might be to understand that they exist. It might even help to recognize that sometimes, the gap of financial literacy emerges from the life circumstances of an individual. For instance, when a female is married, decision-making and financial sharing will be shared by her with her spouse to a limited extent. And having a spouse who is more educated and understanding in financial matters is actually a common reason for a female to either ignore or accept her own gaps in financial education. In these partnerships, females might disengage.