This end of financial year, MYOB is highlighting the important role that women play in the economy, and cheering the nation on as we continue to close the gender gap in financial literacy.
It mightn’t get as much air time as the wage gap or even the superannuation gap, but there’s another gender gap that deserves our attention this end of financial year: the financial literacy gap.
While it’s not a problem specific to New Zealand, research shows that women often have lower levels of financial knowledge than men, and that has ramifications for the economy overall.
A June 2013 report published by the OECD simply called ‘Women and financial literacy’ pulls together evidence from several studies regarding the state of financial literacy across a number of countries, including New Zealand.
Research conducted in 2008 in Australia sheds some light into how traditional gender roles could be influencing financial literacy in men and women.
The report showed that women are generally confident in everyday money management, including personal and household budgeting, saving and dealing with debt.
Conversely, they are less confident when it comes to more complex issues such as investing, understanding financial language and putting aside enough money for retirement.
And while this report doesn’t directly speak to the experience of New Zealanders, it is corroborated by more local studies, including the 2006, 2009 and 2013 Financial Knowledge Survey.
These surveys found women are more likely to control their expenses as well as stay on top of recordkeeping.
Isn’t that a little counter-intuitive? Females are more likely to be interacting with the day-to-day finances, yet also feel less confident in the understanding of financial concepts?
The 2009 survey also found women are more likely to gain financial information or advice from informal sources like friends and family, while men are more likely to draw from formal sources like newspapers, websites and advisors.
But why is this? Perhaps there’s more work to be done by financial institutions and media outlets to be tailoring their information to women, speaking to female experts and sharing female-led business examples?
And before you cry out, “But that research is over 10 years old! Perhaps we’ve turned things around already”, more recent research shows that the financial literacy gap is still very much alive and kicking in New Zealand.
For instance, the Westpac Massey Fin-Ed Centre has been running a longitudinal study into financial literacy since 2012. Its most recent (2017) findings show that females scored 54 percent on average on a financial literacy test compared to an average of 70 percent for male participants.
So, while research in this area remains limited, it’s clear that we can all be doing more to raise female financial confidence. And here’s why…
As one of the more progressive nations in the world, NZ is leading the charge when it comes to closing gender gaps across the spectrum, including financial literacy.
At MYOB, we believe this is really important due to the fundamental role that women have in the economy (it’s no secret women hold an increasing majority of purchasing power).
Wouldn’t it make sense to support women’s understanding of finance as a surefire way to have a positive impact on their financial confidence? And, if so, wouldn’t more confidence in finances help women achieve better business outcomes for themselves and their communities?
As we head into the end of financial year, it’s more important than ever to celebrate and champion the role that women play in our economy.
That’s why this EOFY, MYOB will be featuring more inspiration and advice from successful kiwi women – on top of our ongoing commitment to providing timely information on all things business, finance and tax.