Men Saving, Earning More Than Women
According to a new study by Wells Fargo, 45% are not saving for retirement. In that same group more men (61%) versus 50% of women report that they are saving. However, this could partly be that the median income reported by millennial men is $77,000 versus $56,000 for women.
For college-educated millennials, median annual household income is reported to be $83,000 for men and $63,000 for women. Now, half of all millennials report they are “satisfied” with their savings at this point in their lives, but the gender discrepancy is still very pronounced, with 58% of men feeling satisfied, versus 41% of women.
“The silver lining of the recession that started over five years ago is that a majority of millennials get that saving is a necessity and even equate it with ‘surviving’ tough times. But millennial women are starting out their working lives making far less than men and, as a consequence, are saving less and feeling less contentment at the start of their working lives,” said Karen Wimbish, director of Retail Retirement at Wells Fargo.
Millennials: The Debt Generation?
And we haven’t even gotten to the debt that so many millennials are dealing with which makes saving even more difficult.
A little over 40% say debt “is their biggest financial concern currently.” Four in 10 say their debt is “overwhelming” versus 23% of baby boomers. The study found that 45% of millennial women feel “overwhelmed” by debt, versus 33% of millennial men.
And over half of the millennials (56%) say they are “living paycheck to paycheck,” regardless of gender.
Why Women Aren’t Saving
A big part of women not saving is blamed on a lack of confidence and not feeling financially educated.
According to a study by the Financial Industry Regulatory Authority, millennial women tend to be less financially literate than men of their generation. Only 18% of millennial women demonstrated high levels of financial literacy, compared with 29% of millennial men.
Another contributing issue is that the entrepreneurial spirit is strong in millennials. They are graduating from college (often with debt) and then starting their own businesses.
This may be more exciting than getting an entry level job at a big corporation, but those young people are getting set up with 401Ks and receiving more financial education. And the young people starting their own businesses may find themselves with even more debt if the company doesn’t work.
However Cindy Hounsell, president of WISER, the Women’s Institute for a Secure Retirement, told CNBC that when women do receive financial education (which you can get at GoGirl Finance!), they start saving.
She also encourages parents to teach their daughters from a young age about saving.
When millennials were asked whom they trust for credible information to help them make financial decisions, a majority cited “family” (57%), followed by “financial institutions” (54%) and “personal finance experts/personalities” (50%).
“It’s easy to lose your self-confidence based on all the pressures that come to bear when you’re young,” she said. “We need to build strong young women.”
Here are some great tips for new grads on saving when you first start out in the real world.