Financial literacy and wellness among U.S. women: Variations among women

Financial literacy among women varies across socioeconomic and demographic groups (Figure 4).

  • Financial literacy tends to be lowest among Gen Z women and highest among Gen X and baby boomers. Gen Z correctly answered 37% of the index questions, on average, compared with 51% among Gen X and 53% among boomers. While generation and age effects cannot be distinguished in a single cross-section of data, these findings stand out for how little young women seem to know given the complexity of today’s financial environment.

  • Financial literacy tends to be greater among women with higher household incomes. There is a significant 25 percentage point difference in P-Fin Index questions answered correctly between women with household incomes below $25,000 and those with household incomes of $100,000 or more.

  • Personal finance knowledge varies with employment status. In particular, unemployed or disabled8 women have markedly lower financial literacy than those employed9 and those retired.

2020 P-Fin Index Figure 4
Source: TIAA Institute-GFLEC Personal Finance Index (2020).

Financial literacy also varies among women depending upon family status (Figure 5).

  • Even though they are de facto responsible for making their own financial decisions, women who have never been married tend to have lower financial literacy. They correctly answered 41% of the index questions, on average. By comparison, women who are married or living with a partner and women who are widowed or divorced correctly answered approximately 50%.

  • At the same time, women with children under age 18 tend to have significantly lower financial literacy than those with no children under 18.

2020 P-Fin Index Figure 5
Source: TIAA Institute-GFLEC Personal Finance Index (2020).

Finally, financial literacy tends to be greater among women with more education and those who have received financial education (Figure 6).

  • Women with a college degree correctly answered 61% of the P-Fin Index questions, on average, compared with 26% among those with less than a high school degree.

  • There is a 13 percentage point difference in the percentage of index questions answered correctly between women who have participated in a financial education class or program and those who have not.10

2020 P-Fin Index Figure 6
Source: TIAA Institute-GFLEC Personal Finance Index (2020).

8 Includes those unemployed or on temporary layoff, as well as those disabled and unable to work.

9 Includes those employed full time, part time and self-employed.

10 See Lusardi and Mitchell (2014) for a discussion of existing research regarding the relationship between financial education programs and financial literacy levels, as well as the challenges inherent in empirically establishing causality and effectiveness.

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