With International Women’s Day on March 8th, it’s important to celebrate the social, cultural, political, and economic achievements women have made throughout the past decades. Though we take many things for granted now, women have historically been excluded from the financial space.
In the past, women weren’t permitted to take on debt or even own property of their own. While we usually think of things as equal today, does gender still matter when it comes to debt? It’s true we’ve come a long way as a society, but that doesn’t mean we don’t still have room to grow.
In this guide, we’ll explore some of the ways gender makes an impact when it comes to debt.
Gender Equality and the Pay Gap
First and foremost, we couldn’t talk about whether gender matters when it comes to debt without talking about the pay gap. Australian women are historically paid 17.5% less than men for the same roles. To put this another way, women in Australia have to work an extra 64 days per year to get the same pay for the same work.
What’s behind the gender pay gap? We can point to a number of real issues:
- Stereotypes about the type of work each gender “should do”
- Lack of women in senior roles
- Few flexible work opportunities for parents
- Differences in education or work experience
- Mothers on average spend more hours looking after the family
Though more people are speaking up about these very real gaps in equality, change doesn’t happen overnight. This leads some women to feel pressured to choose between work and family, and there are different expectations for women than men. Above all, it’s clear the playing field is not equal.
Men vs. Women: Who Avoids Debt?
Just as women are supposedly from Venus and men are from Mars, each gender handles money differently. This has to do with how each gender is raised, socialised, and exposed to the world around them. In general, women are less likely to take on debt compared to men.
A report from Yahoo Finance found that men carried over 4% more debt than women. Similarly, women are less likely to take out large home loans or carry a higher debt-to-income ratio. When it comes to repayment, men are also more likely to fall behind on their mortgage or other debts compared to women.
Women Are More Likely to Ask for Help
We’re all familiar with the joke that men never ask for directions. Just the same, men are much less likely to seek help when it comes to debt counselling. Struggling with your financial situation is normal and okay. It’s a very common experience, and asking for help from a financial expert is often the first step to regaining control.
That being said, most credit counsellors report they work with more women than men. Though they’re willing to get help, men take much longer to make that first move. When you consider that women typically shoulder the burden of household labour, this makes sense. Getting ahead of the debt is undoubtedly a smart move. The sooner you ask for help and create a plan, the more options you have.
Does Gender Really Matter with Debt?
Ultimately, all of the above concepts are simply averages and generalisations. Everyone responds differently to debt, and not everyone fits with the trends. What we can say with confidence is that everyone deserves equal opportunities to manage their finances with confidence regardless of gender.
From a legal standpoint, lenders can’t consider gender when making decisions about credit or loans. Discrimination based on race, colour, sex, and more is not allowed. If you think you’re being discriminated against based on your gender, submit a complaint through the proper channels. Your gender has no scientific bearing on your ability to manage your money.
Regardless of where your gender falls, there are some truths we can all recognise to level the debt playing field for all:
- Understand the “pink tax”: The “pink tax” refers to any gender-based price hikes. For example, women pay more for things like personal care items, clothing, and so on.
- Financial literacy is for everyone: In the USA, only 41% of women (vs. 51% of men) report being taught how to prepare for retirement or invest. Financial literacy is for everyone, not just men.
- Men can be change-makers: Lastly, men can be allies to advocate for equal pay in the workplace and take on more of the household burden.
Are you worried about your debt? No matter how you identify, you’re not in this alone. Debt affects everyone at some point, and it’s okay if you need help along the way. Contact the team of experts at Debt Busters today on 1300 368 322 for your free consultation.