Most Americans have a debt of some sort, be it a mortgage, credit card debt, an auto loan or a combination of different types. People from all walks of life carry debt: People who earn $200,000 per year and people who earn $20,000 annually; apartment dwellers and homeowners; Millennials and baby boomers; women and men.
Are you curious about some findings and statistics related to gender and debt? Keep reading to learn more.
Women Have Half as Much Saved for Retirement as Men
Whether retirement seems like a long way off or it’s just around the corner, it’s important to set yourself up with a healthy amount of savings. According to a recent study, women had $45,604 saved for retirement on average, while men had $90,189. There are a few reasons this vast disparity may be occurring, including the unfortunate gender-based wage gap. Women may also be more likely than men to have to take breaks from their careers to give care, either to children or aging family members.
Why is it so important for people of all genders to start saving for retirement early and consistently? Compound interest allows you to earn returns on your initial investment and the interest it’s accumulated—which leads to a helpful snowball effect.
Just consider this example cited by CNBC. Assuming you invest $250 per month with an 8 percent annual return:
- If you start at age 25, you’ll have $878,570 by age 65.
- If you start at age 35, you’ll have $375,073 by age 65.
- If you start at age 45, you’ll have $148,236 by age 65.
Keep the power of compounding interest in mind as you save for retirement. Set up automatic contributions from your paycheck to go toward retirement—or reduce expenditures so you can tuck away money each month and reap the rewards of compound interest.
Women Have More Student Loan Debt Than Men
Women have more student loan debt than men, and this debt stays with them longer. This is due partly to the fact that more women than men attend college, of course. But a higher percentage of women graduate with debt than men. Part of the reason the debt sticks around for longer is due to the wage gap upon securing employment. There’s also the “motherhood penalty” women may face upon trying to return to the workforce after having children—meaning organizations often offer lower salaries to mothers and hire them less often.
Men Tend to Seek Debt Help Later
There are many debt solutions available for consumers. There’s debt consolidation, or taking out a personal loan to cover high-interest debts then paying back that single loan over time. There’s debt settlement through a program like Freedom Debt Relief, which requires enrollees to save up money in a special account so negotiators can work with creditors to reach a lower settlement. There’s also credit counseling, which entails working with a professional to come up with a repayment plan, often with lower interest rates on your debts.
According to one credit counseling manager based on her experience, women are about twice as likely to seek help in the form of credit counseling. Another agency reports about two-thirds of clients they see seeking budget and debt help are women—and three-quarters of people who enrolled in a debt management plan were women.
These curious findings and stats about gender and debt are based on research and data, but how an individual deal with debt obviously boils down to their specific circumstances. The most important thing is doing your research, knowing your options and communicating effectively about debt.