The Importance of Financial Literacy for Women

At least once a week, I’m asked why I’m so passionate about the importance of financial literacy, and especially women’s financial literacy. I think some of the statistics that are circulating during this Women’s History Month/International Women’s Day make the point. While we all know that American women score a D (or lower) on financial literacy quizzes, that nearly 80% of elderly women live below the poverty line, and that women lost 5.3 million jobs with this pandemic compared to 1.8 million men, there are some deeper issues at play when a woman lacks the financial wherewithal to understand her fiscal situation.

Based on estimates from the new World Health Organization study, and considered low by social services professionals handling the issue, at least one-third of women have experienced some form of domestic abuse and those numbers don’t include the majority of the pandemic months when domestic violence has risen over 40%. What does this have to do with financial literacy? Stunningly, financial abuse occurs in 99% of domestic abuse cases (per the NNEDV) and the lack of financial literacy exacerbates this issue. If someone doesn’t understand money issues, they are far less likely to understand when they are being taken advantage of or abused.

As we move into the 2nd year of COVID (Seriously??? Year 2??), financial literacy can help someone understand how to interpret the information they are being fed by the government / the media / social media. While sources have been celebrating that COVID death rates are dropping, anyone who has even a modicum of financial literacy can easily recognize that dropping to 2,000 deaths/week only means we’ve reached levels from last summer when we were all pretty sure life was teetering on the edge of craziness. Part of financial literacy is being able to put perspective to numbers the same way we determine the value of something we are paying for. For example, I may be paying more for a pair of shoes but I know that designer makes shoes that don’t make my feet ache (and I’m not ready to give up the heels….).

Moving away from COVID and the pandemic, let’s chat about climate change / environmental pollution (because, why not hit another third rail, next up religion…No, I won’t do that to you all). Helping women better understand their finances can help them put the resources together to move away from a bad housing situation. Shockingly but not surprisingly, the Greater Rochester Area has more than its fair share of environmental clean-up areas (thank you Eastman Kodak, 3M, and DuPont) and anyone living along the Lake understands the impact of climate change. If you don’t understand finances, how can you evaluate repair quotes or wisely choose a new home that you can afford? Too many women default to “that house costs more than I’m paying now” and forget to incorporate things like additional medical co-pays from living in a situation that makes their kids sick or all the other expenses that could change with a housing move. Understanding what we’re spending is also understanding how those different categories relate to each other.

Moving on to politics (I took religion off the table, not politics…), a financially literate woman understands that no law school (at least none we could find) requires any financial or economic courses to earn a law degree so when she casts her vote for an attorney running for office (54% of Senators and 37% of House members), she is casting her vote for someone with no educational background to evaluate the financial decisions being made about the fiscal future of our country. That means her vote is now a conscious choice, which is a far more educated choice, than voting for someone simply along party lines.

So, yes, I am passionate about the importance of financial literacy. Without it, I fear that the new normal will feel a little more like wrestling with Cujo than strolling in Kansas with Toto.