By Molly Stazzone
Photo courtesy of taxcredits.net.
More women are enrolled in college, more women have dominated the workforce, and more women balance work with parenthood than men. But a 2010 study by ProLiteracy found that more women than men lack financial literacy.
ProLiteracy, a nonprofit organization that focuses on education and literacy, found that 36 million American adults, 46 percent of them women, have literacy skills below the basic level. Financial literacy is a person’s ability to understand and manage financial sources for their well-being.
Amy Schmitz, the Director of Marketing and Communications at ProLiteracy as well as the co-author of Women and Financial Literacy, explains the problem to BTR.
“36 million people can only do basic level reading, writing, and math. These people–both men and women–do not know how to balance a checkbook, or budget their money,” Schmitz says. “There are some women who live in certain cultures that still rely on their fathers, brothers, and husbands to give them money, to provide for them, and to pay their bills.”
Research shows that generally speaking, women with low literacy skills are thought to be less knowledgeable about finances than men and women who have higher literacy skills.
Schmitz adds that ProLiteracy wants to educate Americans on why financial knowledge is important.
“If for some reason there is a divorce in the family, adults with low-skills in finances will lack how to pay credit card statements, how to pay a mortgage, and how to balance a budget,” she explains. The nonprofit examined the critical need to better integrate American adults who don’t have financial knowledge.
One reason as to why research shows women are generally less financially skilled is that 41 percent never got the education they needed when it came to finances. Many of these individuals function at or below the US poverty level, and many people struggle to find and maintain living-wage employment.
“There needs to be more programs based on finance skills for all American adults with low-skills in finances nationwide,” Schmitz said.
Another reason women are not more financially educated than men can be attributed to gender stereotypes in regard to math and budgeting money. However, Schmitz says that’s not true. “Women are just as good as men, and can have math skills as well as men.”
A 2012 report by the National Foundation of Credit Counseling (NFCC) found that two in five US adults (43 percent) report they have a budget and keep close track of their expenditures. More than half (56 percent) admit they do not have a budget, which includes more than one in five adults (22 percent) who say they don’t have a good idea of how much they spend on housing, food, and entertainment.
Individuals who know their credit score are more informed about their financial status, which helps them to stay away from debt, manage their expenses, and have an understanding of how to pay their mortgage. Furthermore, ProLiteracy found that 57 percent of our target population does not know what their credit score is, nor do they know what influences it.
Paul L. Urich, a consumer bankruptcy lawyer, wrote in his blog about the importance of individuals knowing their credit report.
“A bad credit report can also affect a person’s career options, depending on their field… the majority of consumers between the ages of 18-34 don’t know their scores,” Urich said.
There is some good news about restoring a credit score, though: “A person can’t fix something if it’s not broken. Knowledge is power and an important aspect of financial stability.”
Since ProLiteracy released its study four years ago, there have been no follow-ups on whether women have since received more financial education.