Michelle Clardie, Bankrate.com
Despite attempts at financial equality, gender continues to affect almost every aspect of personal finance, including income, spending, investments, and consumer debt.
On average, men earn more, spend more, save, borrow and invest. Women tend to be more cautious about money, which makes sense because it’s less. Although the data are not robust for transgender and gender diver (TGD) individuals, new research shows an even greater pattern of financial burden for this marginalized group that works to overcome the prejudice and early setbacks caused by the lack of financial support that cisgender peers usually receive from their families.
Whatever your gender is, recognizing the role that gender plays in personal finance can help you better understand your financial hurdles and what others are facing.
General differences in finances by gender
The statistics only share a small portion of gender-based finance stories. Chromosomes, gender, and gender expressions do not affect someone’s ability to manage money, build good credit, use debt responsibly, or make future investments. However, external factors and social pressures assigned to gender roles have economic implications.
On average, women are still responsible for most of their family care and family labor, negatively affecting their chances of lifelong acquisition. Women also tend to suffer from the more severe financial consequences of divorce. In contrast, men are socially pressured to vent their wealth and status regardless of success, and often feel that they are in debt to maintain their appearance.
Transgender individuals usually take on more debt than their cisgender peers due to lack of financial support and living accommodation provided by their families. This puts transgender or nonbinary individuals in a more economically unstable position than cisgender men and women.
Get differences based on gender
After decades of progress narrowing down gender wage gaps, in 2023, the gap widened significantly for the first time in 20 years, according to annual revenues from the US Census Bureau’s US report.
Women working full-time has declined from around 82.7% of men’s salaries in 2023, 84% in 2022. Full-time male workers earned a median salary of $66,790, while full-time female workers earned $55,240. This will result in a difference of $11,550 a year. This is a gap that only widens for women of colour, women with disabilities, and women working part-time.
The median income for all American men in 2023 was $56,280, while the median income for all American women was just $42,110.
Information specific to TGD individuals cannot be acquired.
Differences in spending by gender
Expenses tend to correlate closely with income, with higher earners spending more.
The latest consumer spending survey from the Bureau of Labor Statistics found that the average single woman spends $42,174 a year, while the average single man spends $43,299.
Below is a breakdown of spending by category:
Types of spending Single Woman Single Man Food $4,899 $5,302 Homes $17,093 $16,309 Apparel and Services $1,123 $833 Transport $5,170 $7,066 Healthcare $4,131 $3,038 Entertainment $1,899 $1,91444
Single men spend more than single women on meals, transportation and entertainment. Single women spend more on housing, apparel/service and healthcare.
It is noteworthy that the average age of single women from the survey is 60 years old, and that of single men is 52 years old. Costs of living, dependents, disability and other considerations also affect income and expenditures.
There is no data from the Bureau of Labor Statistics that breaks down the income and costs of transgender or non-binary individuals.
Borrowing gender differences
Experian compared the debt balances of men and women and found that men carry more debt in all categories except student loans.
On average:
Men have 16.3% car loan debt than women. Men have 2% more credit card debt than women. Men have 9.7% mortgage debt than women. Men have 20% personal loan debt than women. Women have 2.7% student loan debt than men. Debt Female Male Credit Card Balance $6,232 $6,357 Student Loan Balance $36,131 $35,188 Auto Loan Balance
Consumer debt information specific to TGD individuals is not available.
Differences in credit scores by gender
Equal Opportunity Credit Act is primarily prohibited using demographic information including gender in credit reports, making it difficult to assess credit scores by gender.
However, the Federal Reserve analyzed the credit scores of thousands of men and women in 2018. The findings show that average men’s scores are slightly higher than average women’s scores, but controls for age, while gender has little effect on credit scores. For example, the average Vantages Core 2.0 for men aged 31-40 was 793, while the average for women of the same age was 785. Although this data is outdated, it is unlikely that this disparity will change significantly.
There is no reliable data to distinguish between non-binary individual credit scores.
Invest in gender differences
Women are less likely to invest than men. A study commissioned by BNY Mellon Investment Management found that if women invest at the same rate as men, their assets under management today have over $3 trillion in additional assets.
BNY cites gender pay gaps, investment risks and lack of involvement as key factors for this disparity.
“We are pleased to announce that Anne-Marie McConnon, Global Chief Client Experience Officer, BNY Mellon Investment Management, has announced that: Some of these are influenced by demographics and personal circumstances, but some are the result of how the investment industry has traditionally engaged with women. In fact, 86% of asset managers admit that their default target client is male.
There is no information specific to TGD’s individual investment habits.
Differences in financial stress by gender
Women are more likely to report feeling more stressed about their finances than men. A recent bankrate study found that 46% of women said that money issues had negative effects on their mental health, prompting feelings of anxiety, depression and stress. Only 38% of men report feeling the same financial stress.
A recent study in the International Journal of Consumer Studies found that transgender college students are more financially burdened than their cisgender peers. According to the study, “TGD students had significantly lower financial optimism, economic self-efficacy and financial socialization than their cisgender peers.”
Discrimination in lending by gender
Laws are in place to prevent discrimination against gender lending.
The Fair Housing Act of 1968 prevents discrimination in mortgage lending, particularly based on race, color, national origin, religion, gender, gender identity and sexual orientation, disability and family status. It was not until 2020 that federal protections were introduced to prevent discrimination against housing based on gender identity.
Additionally, the Equal Credit Opportunity Act of 1974 prohibits discrimination in any type of lending based on race, color, national origin, gender, marriage status status, age, or participation in public assistance programs.
Before 1974, lenders were allowed to require women to have male co-signers before approving the loan. This made it nearly impossible for women to start a business without the consent of building credits, buying a home, taking out loans and men to support them. The law made this discrimination illegal, but the prejudice of this era is still moving forward.
Conclusion
Gender is not scientifically about your ability to manage money, but social expectations and gender norms still affect your income potential and can pressure you to use or borrow in a specific way. We have come a long way since women were unable to get their own credit cards and non-binary people could be charged more for their homes, but there is still a long way to go.
FAQ
Do lenders take gender into consideration when making decisions? No, the lender cannot consider your gender or gender identity when making a decision. The Fair Housing Act prohibits discrimination in mortgage lending, while the Equal Credit Opportunity Act prohibits discrimination in other forms of lending. What if I’m financially discriminated against because of my gender? If you feel that you are financially discriminated against because of your gender or gender identity, try to gather as much evidence as possible. If you are in a state where you are allowed to consent to one party for recording, take notes and record the conversation. Maintain written communications to the media for better tracking. Once you have collected evidence, we will file a complaint through the appropriate channel, depending on your situation. Regarding housing discrimination, including mortgage lending and rental price discrimination: file a complaint through the U.S. Housing and Urban Development Agency. Regarding credit discrimination, including loans, mortgages and credit cards: file a complaint through the Consumer Financial Protection Bureau. Regarding all types of discrimination: Submit a report to the US Department of Justice’s Civil Rights Division. Your state, county, or city may also have a civil rights department where you can file a complaint. Note: Some of these may be changed due to changes in the Trump administration. Additional research may be required to find the best place to get help.
Key takeout
On average, men have more debt than women in all categories except student loans. Gender pay gaps affect women’s ability to earn, save, invest and build wealth. Women spend less and have lower debt balances, but are more financially stressed than men.
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