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What One Important Skill Do Female Employees Lack That Widens the Male-Female Financial Wellness Gap?

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Last Update: May 29, 2023

The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) looks at adult financial literacy. The 2022 P-Fin includes a brief1 about financial literacy among women. The brief shows that women have lower financial literacy than men, plus:

  • 55% of women could not answer half of the questions correctly
  • The largest gap in knowledge is in investing
  • All generations of women lag behind men of the same generation
  • Younger generations of women have less financial knowledge than their older counterparts

Unfortunately, women with low financial literacy scores are more likely to have financial problems. This includes an inability to make ends meet, more debt, and less likely to be able to handle a financial emergency. Plus, these women are five times more likely to spend 10 or more hours each week dealing with financial issues.

However, research findings2 suggest that this gap isn’t entirely about financial literacy.

What Is Missing?

Although lack of financial information accounts for two-thirds of the discrepancy between men and women, the other third, according to the researchers, has to do with confidence. Here’s what they learned.

Initially, those taking a financial literacy survey were asked three questions known as “The Big 3.” These questions include:

1. Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

A. More than $102
B. Exactly $102
C. Less than $102
D. Do not know
E. Refuse to answer

2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

A. More than today
B. Exactly the same
C. Less than today
D. Do not know
E. Refuse to answer

3. Please tell me whether this statement is true or false. “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”

A. True
B. False
C. Do not know
D. Refuse to answer

It turns out that women answered “Do not know” far more often than men. For example, on question #3, over half of women (55%) stated that they did not know the answer compared to just 30% of men. Of those who answered the question, 62% of men got the answer correct compared to just 34% of women. This is a considerable gap.

So the researchers tested the group again. However, this time, they removed the “Do not know” option. This time 82% of the men answered correctly as did 73% of the women. Interestingly, many women who selected the correct response did not feel confident that they had. 

The researchers found that there is a financial literacy gap, but that women know more about the topic than they think they do. Then, they concluded that financial literacy programs targeting education alone will not be enough to close the gender gap. 

How Employers Can Help

The best way to help female employees close the financial literacy gender gap is to help them have confidence about financial topics. However, providing information is not enough. Instead, a financial wellness program should include a game-based learning environment.

In such an environment, employees learn more than information about financial topics. They also learn about financial behaviors, why certain behaviors need to change, and then get practice changing that behavior. 

When employees interact with a game-based financial wellness program, they:

  • Have the freedom to explore
  • Receive information in a context they understand
  • Are given clear objectives
  • Break learning into manageable chunks
  • Develop new behaviors and phase out undesirable ones
  • Increase recall
  • Use information in new situations
  • Receive awards
  • See growth and track progress

As employees interact with a gamified financial wellness program, their confidence climbs as they feel a sense of accomplishment and capability.

How the Enrich Financial Literacy Platform Can Help

Enrich is a financial literacy platform that uses game-based learning to:

  • Maximize engagement
  • Acquire knowledge and skills
  • Gain mastery
  • Apply information to real-life financial experiences

First employees will take a financial wellness assessment. The answers to their questions will personalize the program to best suit their needs. Then, through videos, articles, tools, calculators, assessments, infographics, and more, they will work on core financial competencies.

As your female employees learn more about borrowing, saving, insuring, investing, and comprehending risk in the game environment, they will feel more confident about that knowledge – and the financial gender gap will shrink.

To learn how Enrich can provide your employees with the financial education they need to become financially well, see what the award-winning Enrich Employee Financial Wellness Solution includes.



1 - https://gflec.org/wp-content/uploads/2022/06/TIAA-Institute-GFLEC_Financial-literacy-among-U.S.-women_Data-Brief_June-2022.pdf?x70470

2 - https://www.marketwatch.com/story/whats-behind-the-financial-literacy-gender-gap-these-academics-both-male-and-female-found-one-answer-11620068977

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