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Women lag behind men on financial literacy


Americans score poor marks when it comes to financial literacy. And women lag behind men — which could have troubling consequences for their retirement and overall financial health.

These were the takeaways from two recent studies. The first, from researchers at the University of Georgia and Kansas State University, analyzed data from the FINRA 2012 National Financial Capability Study, a survey of more than 25,000 US adults. The researchers found that women across age groups answered fewer questions correctly than did men on core financial concepts such as interest rates, inflation, and risk. (You can test your own knowledge here.)

The study, presented at the annual meeting of the Academy of Financial Services last fall, also found women lagged behind men in financial capability, a measure that compares objective with subjective knowledge. (Subjective knowledge was measured by asking respondents how they would assess their overall financial knowledge.) Men were far more likely to score high on both the objective and subjective measures than were women.


Financial literacy is important because it is linked to actions such as planning for retirement, saving for education or a home, and other important goals.

“Combining financial knowledge with confidence — that’s where action comes from,” says study co-author Cliff Robb, associate professor of personal financial planning at Kansas State University. “If people are hesitant — if they’re not confident — they are not going to act on their knowledge.”

Women are also more financially vulnerable than men, as measured by a question asking respondents if they could come up with $2,000 if an unexpected need arose in the next month. (Forty-four percent of women said they “probably” or “certainly” would not be able to, compared with 34 percent of men.)

One may question whether the gender gap arises from how household duties are split: If men make most of the financial decisions, women may see less of a need to be financially knowledgeable themselves. Yet a separate study found the gap persists between single men and women and those who are divorced or widowed. It also found that women who make the financial decisions for their household are less financially literate than their male counterparts.


The study, which looked at FINRA (Financial Industry Regulatory Authority) data and similar financial literacy studies around the world, found the gender gap appears in many countries.

The findings are worrisome, the authors note, because women live longer than men and may spend part of their retirement in widowhood. Women who may already be vulnerable — whether because they are elderly and living alone, or because they are going through a divorce — may be at even more of a disadvantage because of their lack of financial knowledge, adds co-author Annamaria Lusardi of the George Washington University School of Business.

Financial literacy programs targeting women and girls may help to bridge the gap, Lusardi says. Evidence suggests these programs will be well received: A new survey by Fidelity Investments shows an overwhelming majority of women want to learn more about financial planning (92 percent) and get more involved in their finances (83 percent) over the next year.

Ami Albernaz can be reached at