In general, women face more difficulty saving than men do. A recent GOBankingRates survey found that 37% of women have contributed nothing to their savings this year versus just 25% of men. Women were also more likely to have saved less than $1,000 if they did contribute to savings — among Americans who have saved some money this year, 25% of women contributed $1,000 or less versus 20% of men.
On the other end of the spectrum, women were less likely to have saved large amounts of money. Three percent of women contributed over $10,000 while 7% of men — more than double the percentage of women — were able to add five figures or more to their savings in 2023.
Why is it harder for women to save than men? Here’s what studies show and what financial experts have to say.
Women Tend To Earn Less Than Men
“Women, as compared to men, are often more challenged to save money because they are usually less financially literate and likely to be in charge of their finances while earning less,” said Alissa Krasner Maizes, a financial planner, licensed investment advisor and the founder of Amplify My Wealth.
Women earn only 82 cents for every $1 that men earn, according to the U.S. Census Bureau. This discrepancy holds across almost all industries, and as women age, the gap gets even wider. Only in a handful of occupations — such as healthcare social workers — do women earn slightly more than men do.
For non-white women, this pay gap is even more acute, according to Census data. Black women earn only 63 cents and Hispanic women only 57 cents for every $1 that white, non-Hispanic men earn.
“It’s essential that when looking for a new employer, starting a new business or increasing their cash flow, women recognize their value beforehand,” Maizes said. “It’s crucial to take the time to write down the value they provide and research what other people –men and women — with similar expertise get paid for delivering the same value. If they ask for a raise and still do not get the wages they deserve, they should ask to be reconsidered for a raise within a set time or look for a new position elsewhere.”
Women Are More Likely To Be Caretakers Than Men
Women have made considerable strides in closing the pay gap over the last several decades. But the U.S. Census Bureau reports that the pandemic has stalled those efforts as a lack of child care has forced many women to leave the workforce.
After all, women are more likely to leave their jobs to care for their children than men are. A 2016 Pew Research study showed that at the time, 27% of mothers were stay-at-home moms compared with 7% of fathers who were stay-at-home dads.
Beyond caring for children, as many as 25% of women are caregivers to friends or family with a health problem or disability compared with only 19% of men, according to the CDC.
“When women pause their careers, they should continue to invest in themselves by keeping their relationships with potential employers or clients open for future opportunities,” Maizes said. “A great way to leave the door open is to have a LinkedIn account to showcase their skills and experience, connect with people, and build and foster relationships.”
How Women Can Save $20,000 More Efficiently
Despite these economic challenges, women still can — and should — aim to save for their future. Olivia Tan, a personal finance coach and co-founder of CocoFax, said automating your savings is a crucial first step.
“The best way for women to save $20,000 is to open a savings account and set up automatic contributions,” she said. “Have the savings contribution drafted electronically into your savings account before you can spend it. Even though it may seem like a painful deprivation at first, it will get easier as you get used to not having those funds to spend.”
Maizes agrees and recommends opening different kinds of accounts based on your various savings goals.
“I recommend opening a high-yield saving account separate from other money and accounts for short-term goals,” she said. “But when saving money for long-term goals at least 10 years in the future, such as retirement, it is best to invest in a well-diversified portfolio of low-cost mutual funds and ETFs and consider tax-advantaged accounts.”
Gabrielle Olya contributed to the reporting for this article.
Survey methodology: GOBankingRates surveyed 1,091 Americans ages 18 and older from across the country between Aug. 14 and Aug. 16, 2023, asking 20 different questions: (1) Have you had trouble paying your utility bills (gas, electric, heat, internet, etc.) in the last six to 12 months?; (2) Which of the following bills/expenses has been the hardest to keep up with over the past year?; (3) Have you bought a car/truck in the last six to 12 months?; (4) Have you ever been on food stamps?; (5) Have you or would you use artificial intelligence (AI) to earn a passive income?; (6) Where do you shop for the best deals on groceries?; (7) What is your current annual income?; (8) How much were you able to contribute to your savings this year?; (9) How much have your savings/investments decreased over the past year?; (10) Next year’s (2024) Social Security Cost of Living Adjustment (COLA) will be 3% instead of the 8.7% it saw in 2023. Will this affect you?; (11) What assets do you have in your retirement portfolio? (Select all that apply.); (12) How much money do you currently have saved for retirement?; (13) How much personal savings do you currently have?; (14) What’s the first step you would take if you were starting a small business?; (15) If given the choice between your current job and starting your own business, which would you choose?; (16) If you have any plans to start a small business, what is the timeline?; (17) How much do you currently spend on rent?; (18) How much do you currently pay monthly on your mortgage?; (19) How much has your housing (rent, mortgage, etc.) gone up over the past year?; and (20) How long do you believe it will take you to save in order to buy a house? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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