Why Gen Z Women Have Less Savings Than Men — and How To Change That

A woman sits at her desk with her hand over her face.
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Gen Z breaks a lot of ground. They’re the most ethnically diverse generation, known for prizing equity and inclusivity in the workplace. They’re also tech-adept and skilled workers, born into a world that was already saturated with highly sophisticated digital technology and plugged into the endless scroll of social media. As far as their financial habits go, though, Gen Z is still very much in the early learning stages.

These people are quite young — between 18 and 25, for the adults — but we can already pin down some money trends with Gen Z, one of which is concerning: Gen Z women are saving less than their male peers.

According to a new Bank of America report focused on the spending habits of Gen Z, only 38% of Gen Z women have enough emergency savings to last three months, compared to 48% of Gen Z men. This isn’t the only worrisome discrepancy. According to the report, Gen Z women feel less equipped to manage day-to-day expenses than men (63% versus 76%) and less equipped to save for retirement than their male peers (37% versus 49%). 

So why are Gen Z women behind Gen Z men when it comes to good financial habits?

The Gender Gap Amid Inflation

“Many of Gen Z are just starting out in the workforce with entry-level salaries while facing rising rent and living costs, as inflation continues to impact the U.S. economy,” said Lisa Fischer, chief growth and lending officer at Mission Lane. “In addition, according to a Pew Research Center analysis of Census Bureau Data, nationally, women under 30 who work full time earn about 93 cents on the dollar compared to their male counterparts.”

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How do women tackle the gender wage gap? It’s daunting, but progress is being made thanks to women’s hard work.

“To address the wage gap, women in leadership positions and their male allies have an opportunity to be an advocate for women entering the workforce to help them build their careers and create fair opportunities for them to succeed,” Fischer said.

“In addition, employers and financial service providers can provide financial education resources to advise on best practices for saving, investing and budgeting effectively in a volatile economy. Employers can also be supportive by providing benefits that align with the matters and goals most important, and most costly, to Gen Z, such as mental health and wellness, fitness and transportation.” 

Lack of Financial Literacy 

“Minimal financial literacy levels have a massive effect on women’s lives, requiring them to try harder, take longer to repay their debts and often resolve to accumulate very little,” said Elena Jones, a credit and personal finance expert and founder at FinanceJar

“Because of this absence of sufficient academic achievement, understanding financial records, credit or debit card contracts and other financial data is challenging. Women who lack money management skills have serious consequences, such as incurring massive volumes of late payments, reneging on college loans and experiencing difficulties handling revenue, taxation and assets.”

Like anyone else, Gen Z women must take the issue of lacking financial literacy into their own hands. They can get a sufficient education simply by reading books on the matter (some are pretty light but effective reads) and by listening to personal finance podcasts. The next and most powerful step would be to meet with a trusted financial advisor to get their finances organized and set up for success.   

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Talk About It 

When you’re not in the best financial shape or failing to meet your financial goals, it’s easy to slip into a shame spiral. Resist and speak up!

“Talk to your mothers, daughters, sisters, grandmothers and girlfriends about money,” said Stacy J. Miller, CFP, partner, VP, wealth advisor at Bright Investments, LLC. “People feel that talking about finances is taboo but pulling back the curtains can help the next generation make better choices. Understanding how your salary compares with others will help close the gender wage gap, for example.” 

Write Everything Down 

“Finally, my biggest piece of advice for young people looking to gain a strong financial footing and save more in this uncertain economic environment is to write everything down,” Fischer said.

“Whether it’s scribbling in a notebook or typing out an organized list, keeping a detailed record helps you visualize your cash flow and cut down where needed. Once you have a picture of your spending, you can set saving goals for yourself. Using any tools to track monthly spending will help individuals keep an eye on rising costs and spend within the necessity and luxury expense categories. Staying organized and aware of your financial situation is key to building financial independence.”

Challenge Gender Upbringing and Messaging  

“If we are asking the question on how to change this pattern in young women, we have to first examine the role that gender identity plays when managing our finances,” said  Kimberly JC Enders, CFP, CWS, CFPA, owner of Enders Wealth Management.

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“If a woman’s upbringing says that the path to happiness is to find love, and the secret to finding love is being beautiful, and buying all the things will help us be beautiful — that is a subconscious message on how she should spend her money. It is this very mindset that has to be brought to light. Beauty is not bought from a store, it comes from within. And when this shift in thinking can occur, an increase in savings habits can happen.”

That’s not to say you can’t buy and enjoy beauty products or procedures. However, examining why you’re spending this money and aligning your budget with what makes you truly happy is a great step on the path to financial success.

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