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Women still lag men in financial knowledge and confidence
Women are still significantly behind men in their knowledge and confidence in virtually all areas of finance, despite the fact that the gap has narrowed since 2010, according to
a report by Financial Finesse, a provider of workplace financial education.
Among the report’s findings:
The findings are disconcerting because women generally face more obstacles than men in meeting long-term goals and income needs in retirement, said Liz Davidson, CEO and founder of Financial Finesse.
“Women face more financial obstacles than men do," noted Davidson. "They earn less on average than men but have significantly longer retirements due to the fact that women live an average of five years longer than men. They also face higher health care costs throughout their lives. To overcome these obstacles, they should be saving more than men and investing their savings more aggressively to get a strong long-term return that will sufficiently grow their portfolios. Instead, we see the opposite happening, and this could put women in a dangerous position of not being able to meet their financial needs later in life.”
To rectify this problem, women need to “educate themselves and make their finances a priority,” Davidson said. The good news, she pointed out, is that there are signs that women are taking this message to heart. In the first quarter of 2011, the gender gap began to narrow across all demographic groups, with women under 30 showing the most improvement.
In addition, Davidson noted that women are twice as likely to use workplace financial education services as men and that they are more likely to make changes as a result of the education they receive. "There are numerous studies showing that when they are educated about finances, women actually tend to outperform men in their investing because they tend to trade less, incurring lower fees and taxes," Davidson said.
“This problem can be solved,” she concluded. “We’ve seen firsthand the impact of financial education on women and how well suited women are at taking an active financial role in their households. All the pieces of the puzzle are there. Now it’s just a matter of putting them together.”
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