Why do women have more debt than men?
Earlier this year, on International Women’s Day, I was struck by one particular statistic: women have on average 25% more debt than men. That’s a huge difference, and understanding how such a disparity occurs should help us all tackle the problematic cycle of debt.
Pay divide
A BBC analysis from April 2019 found that 78% of companies had a pay gap that favoured men. Overall, this equates to men being paid an average on 9.6% more per year than women in the same level roles. There’s no reason for this, and it's a situation that makes it more difficult for women at the bottom of the pay scale to support themselves.
Employers across the country need to address this pay gap. At Dukes Bailiffs, we pride ourselves on being a caring, family-run company offering equal opportunities for all of our staff to grow and succeed, but we know it’s not easy. That’s why it’s vital all businesses, including ours, regularly take the time to assess whether they really do live up to their values and are paying employees a fair wage for their job, regardless of gender.
Financial education
However, it isn’t just a fair wage that can help address debt issues. Problem debt occurs when people don’t understand how debt accumulates, or how to prioritise the most pressing debts in order to prevent it growing out of control. That’s why better financial education is so crucial. Sadly, it seems women are dealt a bad hand here too.
According to research by Moneybox, there’s a big divide between how Millennial men and women feel they’ve been taught about money management. 70% of female Millennials say they’ve never been taught how to manage money, compared to just 42% of men. This pronounced difference is bound to have an impact.
Knock-on effects
Financiers UBS found that 85% of women think their spouse knows more about investing and 58% defer to their husbands on financial decisions. This is a problem, because in today’s society everyone needs to take responsibility for their finances. Buying essentials like a home, household appliances or a car often involves a loan of some kind, so we need to empower women to be informed and make sensible decisions for themselves and their families.
Perhaps the most disappointing statistic from the UBS study was this one: 55% of women said their spouses discouraged them from being more involved in the family finances. To rectify the situation, we not only need to ensure that women are paid fairly, we need to foster a more inclusive approach to finances and financial education. Only by sharing and spreading knowledge about debt and finance can we help everyone take control of their debt, and prevent it from getting out of control.
Many thanks for viewing my post, I hope you found it useful.
If you have any private questions on the subject matter, you can connect with me on LinkedIn and send me a message, or else you'll find my contact details on my LinkedIn profile: linked.com/in/colin-naylor.
