Why, in 2023, is a lack of money confidence still holding women back? It’s a question I asked myself recently as I pored over the first release of findings from HerMoney’s 2023 State of Women survey. The survey, which looked at over 900 men and women via a partnership between HerMoney and Principal Financial Group, showed that just 45 percent of women say they’re confident about money management, compared to 58 percent of men. Furthermore, when it comes to investing — which is far and away the best way to build wealth for our financial futures — just 22 percent of women consider themselves knowledgeable, compared to nearly half of men.
As I sat with these numbers, I considered the countless financial resources women now have at their fingertips, and the myriad women I know personally who are striving every day to move the needle on financial equality. There’s HerMoney, MyFabFinance, Ellevest, The Budgetnista, Clever Girl Finance, and many others that are changing women’s financial lives. And although we know there are still millions of women who need to take their first steps on the pathway to financial literacy, others have — yet they’re still lacking in confidence.
Our survey showed that women who work for employers that offer financial wellness programs (which include budgeting advice, disability insurance, financial education, etc.) are benefitting less than men are from these programs — and it’s not because they don’t know the programs exist. Women reported a 61 percent awareness of the financial wellness offerings available to them, compared to just 49 percent of men… Yet it was men who reported a greater reduction in their stress levels (28 percent for men vs. 18 percent for women), a more substantial increase in their emergency savings (25 percent vs. 13 percent), a greater reduction in debt (21 percent vs. 9 percent), and a more substantial improvement in setting tangible financial goals (23 percent vs. 15 percent).
It’s disheartening, yes. But there’s another almost unquantifiable factor to consider here: men always “report” feeling “better” and more confident… with literally everything. Male athletes report more confidence than female athletes, and even “expect” success more often than female athletes. Women don’t apply for jobs unless they feel 100 percent qualified. Men? They’ll throw their hat into the ring if they figure they meet around 60 percent of the qualifications. Even when it comes to something as mundane as driving a car, men are more likely to feel confident in their driving skills, despite the fact that they’re much more likely to engage in the kind of risky behaviors on the road that land them in significantly more fatal crashes than women… I could go on, but I’m honestly too mad to keep typing.
Because here’s the thing: Women’s confidence levels rarely — if ever — correlate to their success levels. When it comes to investing, for example, women continually best men with stock market returns, precisely because they’re more willing to ride out market lows and are more skilled at playing the long game with investing — the key for any investor who wants to build real wealth. Our survey showed that the majority of women (55 percent) would choose to hold their investments in an economic downturn, compared to just 40 percent of men. Additionally, just 16 percent of women said they would rebalance or sell stocks during an economic downturn, compared to one-third of men. In other words, what women may be lacking in feelings of confidence, they make up for in actual, real-life wins — “confidence” means nothing if it’s not backed up with proof.
But the problem is we can’t just laugh off this lack of confidence as a non-issue. Because even though women see better stock market returns once they get invested, there are millions more women who aren’t confident enough to even start — and the gender investing gap means that women who do invest, invest just 29 percent of their money, compared to men who invest 40 percent. Women also tend to worry more about our money — our survey showed that women are more likely to say that not ensuring your money lasts a lifetime is a bigger risk than men (76 percent vs. 69 percent).
And women are right to be worried — as long as things stay this way. Women live an average of five years longer than men, but the gender wage gap means they’re earning less. And if women are also investing less, this means they’re on track to have far less saved for retirement, and may be less equipped to weather life’s financial storms as a result.
Thankfully, there are ways women can channel their worries into action — and grow their financial confidence at the same time. Here’s a look at five of my favorites.
Use Your Doubt To Your Advantage
As the numbers show, women don’t have to feel 100 percent confident about something in order to be good at it. And the fact that women are more risk-averse can actually work to their advantage: when more questions are asked, investors are always better served. A healthy dose of skepticism can go a long way towards ensuring women dig deeper into something in order to understand it — and make more informed decisions as a result.
Ask For What You Need
If your employer doesn’t offer a retirement account or financial wellness program, it’s time to ask for those things. Likewise, if you have questions about your investing strategy or whether or not you’re on track to meet your long-term financial goals, it may be time to meet with a financial planner who can offer you a customized plan — along with the words of encouragement you may have been missing.
Start Investing For Retirement, ASAP
If you’ve previously hesitated to open a 401(k) with your employer because you just weren’t sure how long you’d be in the job, or because you needed every penny to put towards expenses, I get it. But now is the time. The longer you wait to save for the future, the more catch-up work you’ll have to do later in life. So, talk to HR to get your 401(k) started. And, if you don’t have one available to you, it’s time to visit a brokerage account (IRL or online) and open an IRA, ASAP.
Seek Education Wherever You Can Find It
I mentioned some of the incredible resources available to women at the top of this article. If you just aren’t sure where to start, immersing yourself is an excellent first step. If you’re more of a visual or audio learner, I’d point you to the HerMoney Podcast, which has new episodes dropping every week, and to InvestingFixx, our investment club for women where we gather on Zoom to learn the ins and outs of investing every other week. Knowledge is the foundation of financial confidence, so even if you’re starting from square one, you can quickly become an investing pro with a little practice.
Tap Into Your Goals And Passions
What goals do you have for your money? A secure retirement? A new house? A round-the-world vacation? Whatever they are, they need to come out of your head and make it onto paper (or into your investing app of choice). Having clear goals can give you a sense of purpose — and help motivate you to keep saving, day-to-day. Additionally, tapping into your passions as an investor — for example, women-owned businesses, organic food, green energy, etc. — can make your investing journey more personally meaningful.
And the next time you spot a study showing that men are more confident with something than women are? Do me a favor. Before your brain translates that to mean “Men are better, women are worse,” take a breath and repeat after me: “Men have hubris, women have humility.”
In the long run, one of these groups will be distinctly better served… and in the meantime, I feel confident that women’s confidence is growing just a little bit, every single day.
Jean Chatzky is the founder and CEO of HerMoney.com and the coaching programs FinanceFixx and InvestingFixx. She is the host of the podcast HerMoney With Jean Chatzky as well as Everyday Wealth. The Financial Ambassador for AARP, she was the Financial Editor for NBC Today for 25 years. Jean is an award-winning journalist and broadcaster, a New York Times and Wall Street Journal best-selling author, and a fierce advocate for financial literacy. Her latest books are "Women with Money: The Judgment-Free Guide to Creating the Joyful, Less Stressed, Purposeful (and Yes, Rich) Life You Deserve" and "How To Money," a guidebook for Gen Z women. Follow her @JeanChatzky.