Women’s History Month Report: Past Financial Barriers Slow Progress

It wasn’t that long ago — perhaps your mother’s or grandmother’s time — when women couldn’t get bank loans or credit cards, and employers could pay them less, explicitly for being women. While women have made considerable strides in attaining financial equity over the past 60 years, this history still plays a role in their current experiences and finances.

A January 2024 NerdWallet survey of more than 2,000 U.S. adults, conducted online by The Harris Poll, asked Americans about the gender financial divide and found remnants of that recent past.

“A lot has changed since the 1960s and 1970s, but these decades and what came before them still impact our financial lives,” says Kimberly Palmer, personal finance expert at NerdWallet. “Acknowledging how our financial experiences differ across gender, race and even age can help us understand what we can do in our personal lives and household budgets to improve our financial outlook as well as the role that governments, companies and institutions can play.”

Key findings

Men are seen as having an easier time finding well-paying jobs, but women are more optimistic about their current roles. More than 2 in 5 Americans (44%) say men have the easiest time finding a well-paying job, while just 11% think women do. However, employed women are more likely to feel optimistic about keeping their current job over the next 12 months, with 81% saying this versus 76% of employed men, according to the survey.

Men were more likely to receive a pay raise over the past year. More than 1 in 4 men (27%) say their salary or pay rate increased over the last year compared with 21% of women, according to the survey.

Both men and women are more likely to say the most financially successful person they know is a man. Just 16% of Americans say the most financially successful person they know is a woman, compared with 37% who say it's a man, according to the survey. That includes 42% of men and 33% of women who say a man is the most successful person they know.

Women were cited as better money managers. Close to 3 in 10 Americans (28%) say women are better at managing money on a daily basis than men. Just 15% say men are better at it, according to the survey.

Financial Outlook

Overall, 72% of Americans say they're optimistic that their financial situations will improve over the next 12 months — roughly equal shares of women (71%) and men (72%). But beneath the surface, there are some disparate perspectives. Here’s a look at several, along with advice for consumers on navigating personal finances.

Current job security and job-seeking

Women have become major players in the labor market over the past several decades. In 1953, about 34% of women participated in the labor force. That figure peaked at 60% in 1999, and had dropped to 57% in 2023, according to the Bureau of Labor Statistics.

But being more prominent in the workforce doesn’t mean getting the best jobs is easy. In the NerdWallet survey, more than 2 in 5 Americans (44%) say men have the easiest time finding a well-paying job (just 11% think women do).

The ability to maintain employment once you find it is key to financial security, and in this regard, women are feeling good. About 4 in 5 employed women (81%) are optimistic about continuing to work in their current job over the next 12 months, compared with 76% of employed men, according to the survey. That divide was larger among generations: just 59% of employed Generation Z (ages 18-27) expressed optimism about their current jobs, compared with 79% of employed millennials (ages 28-43), 84% of employed Generation X (ages 44-59) and 88% of employed baby boomers (ages 60-78).

Stay competitive in your field. Even the best employees aren’t guaranteed their job will be there forever. Keep your resume updated and look at open roles occasionally to stay abreast of what employers are seeking. Then, if the economy takes a turn and you lose your job, you can quickly pursue new opportunities.

Recent pay increases

The Equal Pay Act of 1963 barred employers from wage discrimination based on sex. While the gender pay gap has narrowed since that time, it hasn’t closed.

On average, women's paychecks continue to fall short of those of their male counterparts. According to the BLS, women who are in the 25-34 age group earn about 90% of men of the same age, on a weekly basis. Looking at 35- to 44-year-olds, women earn even less (84%) than men. Lower earnings mean women generally have less of a buffer to rely on when times are tight.

More than 1 in 4 men (27%) say their salary or pay rate increased over the last year compared with 21% of women, according to the NerdWallet survey. That divide expands among Gen Xers, where 40% of men say they had a pay bump and 25% of women say the same.

“Given those pay disparities, it’s harder for women to funnel money into savings and investing accounts, since on average, they are starting with less. With the power of compound interest, those discrepancies can add up over time, creating even greater wealth gaps between men and women by the end of their lives,” Palmer says.

Ask for more from your employer. Only 8% of Americans — roughly equal shares of men and women — negotiated for a higher salary at their current job, according to the survey. Whether it’s time for your annual review or you’re considering a new job, be prepared to negotiate for more money and/or perks. A 2021 study by researchers at the University of Southern California found participants often avoided negotiating compensation, but those who did wound up getting larger pay packages.

Financial Security

Roughly equal shares of men (61%) and women (63%) say they’re optimistic that the financial companies they use care about their financial well-being, according to the survey. But it wasn’t always that way. There was a time when women in the U.S. couldn’t take out loans or have their own credit cards, particularly if they were unmarried. The Equal Credit Opportunity Act of 1974 changed that, barring discrimination by lenders based on gender or marital status.

Access to credit can be a lifeline when unexpected expenses arise. So can an emergency fund. The survey reveals that a smaller share of women believe they won’t have to tap such a fund in the coming year: 65% of men are optimistic they won’t have to dip into their emergency savings in the next 12 months, while 58% of women express the same optimism.

But millennial women are concerned: About 1 in 5 (17%) of this group say they're “very pessimistic” about having to use those emergency funds over the next 12 months compared with 8% of millennial males, according to the survey.

The ability to build an emergency fund can feel like a luxury, one that may be afforded less to folks with less wealth. And while the gender pay gap is notable, the gender wealth gap — which takes debt and assets into account — is even more pronounced, according to the St. Louis Fed.

Indeed, just 16% of Americans say the most financially successful person they know is a woman, compared with 37% who say it's a man, according to the survey. That includes 42% of men and 33% of women who say a man is the most financially successful person they know.

Bolster your emergency fund. A robust emergency fund is the bedrock of financial security. It can insulate you from a variety of financial shocks. If you’re starting from scratch, build your fund incrementally, beginning with a goal of $500, for instance. In the long term, aim to have several months of essential living expenses set aside in a high-yield savings account.

Money management and advice

Having money and knowing what to do with it don’t always go hand in hand. The survey finds nearly twice the share of Americans think women are better at managing money than are men.

Close to 3 in 10 Americans (28%) say women are better at managing money on a daily basis than men. Just 15% say men are better at it. Men are fairly evenly split in this assessment — 21% say women are better at the task and 22% say men are. Women are a bit more biased — 35% say that women are better at it and 9% say men are.

The perspective that women are better at daily money management doesn’t necessarily translate to people seeking out their guidance: 15% of Americans say the person they most often turn to for financial advice is a woman and 25% ask a man.

Gen Zers and millennials are slightly more polarized, with 35% of Gen Z women and 24% of millennial women saying they most often ask a woman for financial advice. Compare that with just 15% of Gen Z men and 10% of millennial men who say the same.

“Own” the financial factors within your control. You can’t control how society adapts to significant cultural shifts (such as allowing women access to financial equity). But you can find ways to take authority over the money you have, learn how to manage your money daily and give yourself the best possible chance to earn more and reach your long-term financial goals.

“Setting financial goals that are realistic and manageable can make it easier to stay on track with your spending and saving habits,” Palmer says. “Sharing those goals with friends and family who can offer support and their own tips also helps. We’re in it for the long run, so think about where you want to be in several decades, and begin taking steps to reach that destination today.”

Methodology

This survey was conducted online within the U.S. by The Harris Poll on behalf of NerdWallet on Jan. 18-22, 2024, among 2,085 adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, contact [email protected].

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