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America’s women face unique financial literacy needs

 

For years, those of us who toil in the field of improving financial literacy in the U.S. have assumed that women face economic hurdles that men never see. Now we have the data to prove it.

Most troubling, American women are far less likely than men to create and stick to a budget – with 47% of women reporting they ignore their budgets or worse – don’t even have one in the first place.

Compared to their counterparts in other nations, women in the U.S. have a particularly bleak view of our teenagers’ money management skills, with 72.9 % saying that U.S. teens don’t understand money management basics.

This pessimism puts U.S. women dead last among the 27 countries surveyed for “Visa’s International Barometer of Women’s Financial Literacy.” The Barometer was released earlier this month at the Financial Literacy and Education Summit held in conjunction with the Federal Reserve Bank of Chicago.

The news, however, is not all bleak. Overall, American women are among the most financially literate in the world, ranking fourth globally, behind Brazil, Australia and Mexico.

One of the many global trends we spotted that also rings true in the U.S. is that having enough money saved to cover emergencies is a key indicator of an individual’s economic stability, regardless of his or her level of wealth. Given their traditional role as family caregivers, women are particularly susceptible to the vagaries of financial turbulence.

Visa’s Barometer reinforces this point and shows that in all but one of the countries surveyed, women have saved less money for emergencies than the men of their nation. And even in that one outlier, Australia, women had barely saved more than the men, the equivalent of just a few extra days of living expenses.

Women, however, seem far more determined than men to ensure that their children grow up financially literate. The data found that women spend nearly three more weeks a year talking to and educating their own children about money management. U.S. women ranked No. 8, speaking to their kids about money an average of 26.6 weeks a year.

Women also told us they believe that governments should require schools to begin teaching financial literacy to children at an earlier age than male respondents. Here, we ranked quite low, with American women saying financial education shouldn’t begin until 11.8 years old, compared to No. 1 Brazil at 8.7 years – although still younger than American men at 12.0 years.

Both are promising signs that the next generation of women will have more of the skills they need to successfully manage their money.

You can see the results of this Barometer, which was compiled from interviews with nearly 26,000 people, at www.PracticalMoneySkills.com/barometer2013.

With the personal finance needs of American women so clearly defined, along with glimmers of a positive foundation on which to build, how do we move forward?

The answer is multi-faceted. No one single entity, no matter how powerful, can improve America’s financial literacy. It requires a tightly integrated approach that must include full participation from parents and teachers, as well as the government, NGOs and financial services companies.

At Visa we take our responsibility to be part of the financial literacy solution very seriously. The tools we create are always free and we try different methods to help ensure that disparate communities in each state are receiving personal finance education in a way that will resonate most with them.

From creating financial education games like Peter Pig’s Money Counter and Financial Football, to developing a comprehensive high school curriculum for classroom teachers, to the newly released Plan’it Prom smartphone app to help teens budget for the big dance, we believe financial education must be taught early and often

Staying relevant – both in terms of constantly evolving financial products, as well as using technology to deliver the educational information – is vitally important.

We aren’t afraid to try new approaches, even if that means failing some of the time. The ones that work, we keep. The ones that don’t are improved or abandoned, in favor of a new tactic. There should be no white elephants in the field of financial literacy. Programs and communications channels that work well today may be laughably out-of-date five years from now.

I am confident that by making financial literacy a national priority and working together, we can make America a more financially literate country – for both or women and our men.

Jason Alderman is Senior Director of Global Financial Education, Visa Inc.