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The gender gap in financial wellness goes beyond the paycheck

Plus 9 facts about the gender financial wellness gap, and how companies can address it

The gender gap in financial wellness goes beyond the paycheck
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March 2, 2022

Most of us are aware of the gender pay gap in the United States. In 2020, women earned 84% of what men earned, meaning they would have to work an extra 42 days to earn equal pay. But did you know that there’s a gender gap when it comes to other areas of finances as well?

In 2021, Origin surveyed 1,000 full-time U.S. employees to understand the state of their financial health. We discovered significant disparities between men and women when it comes to financial wellness. We’ll use this post to explore the existing gender gaps we identified.

Editor’s note: If you’re curious to learn more about employee financial wellness, download our report.

Understanding the gender gap in financial wellness

Financial wellness is a term used to describe your ability to manage your current and future financial needs. Unfortunately, our report revealed notable differences between men and women when it comes to their financial health. Here are some of the trends we noticed with the gender gap:

Women feel less secure in their finances

One of the most notable findings from our survey is that men are nearly 2x more likely to be confident or very confident in their financial health than women. Specifically, 62% of male respondents demonstrated confidence in their financial situations, compared to only 38% of female respondents.

But this isn’t just an issue of confidence—women experience worse financial health than men. And this was only worsened during the pandemic. We found that female respondents were 10% more likely to say their financial health was unchanged or worse in 2021 compared to 2020.

Men are more likely to invest in wealth-building

It’s challenging for employees to reach all their financial goals based on their income alone. That’s why many people choose to invest in wealth-building, which refers to the process of generating long-term income through methods like investing.

Unfortunately, our survey found that women were less likely than men to put disposable income in savings accounts, retirement accounts, cryptocurrency, and brokerage or investment accounts. Men are 27% more likely to put additional income into cryptocurrency to build wealth than women.

Other studies confirm women are trailing men in financial wellness—men have more in their savings than women ($98,000 compared to $62,000), and men are more likely to participate in 401(k) plans and contribute at a higher rate.

Ultimately, this lack of wealth-building means that women are less likely to have financially secure futures.

The sources of financial stress differ

Men and women also differ when it comes to the source of their financial stress. Specifically, female respondents were 16% more likely to rank student loan debt as the top cause of their financial stress compared to men. Another common source of anxiety for all respondents was mortgage payments and rent.

This is valuable information for employers to know so they can tailor their financial wellness programs to address the most pressing needs of all their employees.

Women are less likely to seek professional guidance

Financial professionals can give employees the personalized advice they need to reach their financial goals—whether that’s retiring comfortably or saving up to buy a house.

Unfortunately, working with a financial professional is out of reach for most people—largely due to cost. There’s a reason why 40% of our respondents have never consulted a financial planner, and 21% have only consulted a financial planner once or twice in their lives.

But this trend is even more pronounced for women. In our survey, 47.4% of female respondents have never consulted a financial planner compared to 30.8% of male respondents—a whopping 17% difference.

What can organizations do about the gender gap in financial wellness?

Knowing that this disparity between genders exists, what can employers do to help close the gap? Here are 3 things you can do to get started:

1. Ask for feedback

Our report shows general trends, but it’s essential to ask the women at your organization for more specific feedback. How do they feel about your current financial wellness benefits? What else could you offer to help them feel more in control of their finances?

These are the types of questions you can ask—either through an anonymous survey or one-on-one conversations—to gauge how you can better support the women in your workforce.

2. Provide comprehensive, equitable benefits

Based on your employees’ responses, think about which financial wellness offerings make the most sense for your program. For instance, if women at your company indicate they don’t feel confident in investing, consider offering a customized financial wellness workshop to address this topic.

Also, make sure your financial wellness offerings are equitable. This means being thoughtful about crafting an offering that’s accessible and impactful for all your employees—regardless of their age, gender, or race. For instance, you can make sure to work with financial planners who specialize in advising employees who are BIPOC, LGBTQIA+, and women.

Editor’s note: Learn more in our free eBook “How Financial Wellness Can Help Your Diversity, Equity, and Inclusion Strategy”

3. Offer personalized financial guidance

Regardless of which offerings you choose, it’s essential to offer some form of personalized guidance.

You can provide personalized support in several ways. For instance, you can give your employees the budget to connect with a financial professional. Or, a more cost-effective solution is to invest in financial wellness benefits that have personalized guidance baked into the product or service itself.

With this type of personalized guidance, everyone at your company can build more confidence in their financial knowledge, make better decisions, and take steps toward creating a more financially secure future for themselves.

Employers can play a significant role in reducing the gender gap in the workplace—not only concerning compensation but also when it comes to their employees’ financial wellness. If you’re curious to learn more about the state of employee financial health and wealth, download our report.

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