Let me tell you a story.
Once upon a time, there was a world-famous photographer. She earned a seven-figure salary from a top magazine in addition to the tens of thousands her photographs and books commanded.
Now, according to a lawsuit filed in New York last month, she is being sued for $24 million she had borrowed and, evidently, cannot repay. She is in jeopardy of losing her homes and even the rights to her own art, decades of work.
It's unwise, I know, to generalize too much from any one person's predicament, especially an extreme one like Leibovitz's. But there's still far too much evidence that many ordinary women are handicapped when it comes to money. And it's not a price we can afford to pay.
The female financial gapA survey (.pdf file) released last month by Financial Finesse, an employee-benefits company, is one example:
- Only a third of women say they pay their credit cards in full each month, whereas two-thirds of men do.
- About 74% of women say they pay their bills on time each month, compared with 90% of men.
- Only half of women say they spend less than they earn each month, compared with 71% of men.
- Only a third of women, compared with half of men, say they have an emergency fund sufficient to pay their bills for a few months.
Now, who knows how accurate this survey is. It's based on 3,500 men and women nationwide who wanted to take a financial education class, provided by Financial Finesse, and filled out the company's online questionnaire. It's self-selecting and self-reported.
Still, I'd wager that respondents were trying to appear somewhat financially adept and cast their answers on the rosier side of reality.
Or let's say they didn't and were trying to be as truthful as possible. Either way, the results for the women are pathetic, especially when you consider that most respondents earned between $60,000 and $75,000 a year.
Income is no guarantee of money smarts, I know (see poor Ms. Leibovitz above). But if the more financially successful women are still lagging behind in basic financial management, that worries me.
No, I'm more than worried. I'm furious.
It starts earlyAfter reading the above study, I went looking for a clearer picture -- from someone, anyone -- of women's financial status circa 2009.
I'll spare you the regression analyses and give you the CliffsNotes version of my research (which is still in progress):
- Women aren't taking themselves seriously as financial people.
- Women's lack of financial skills and acumen is putting them in deep financial danger -- in the short and long term.
And it starts early: Recent surveys of teenagers by Charles Schwab and Capital One find that even in high school, girls are not as financially confident as boys.
That lack of skills and confidence hinders women as they mature: Young men are almost twice as likely as young women to have individual retirement accounts or other investment accounts -- 21% of men versus 13% of women, according to a 2009 Schwab survey of 23- to 28-year-old adults.