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The pesky, persistent gender gap in personal finance, in 4 charts

  • Millennials and Gen Z in the U.S. are saving and investing more money than their older counterparts.
  • However, there’s still a considerable gender gap in money management behaviors across younger generations.

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The pesky, persistent gender gap in personal finance, in 4 charts

In the wake of the pandemic, young consumers in the U.S. seem to be mindful about their financial future. Millennials and Gen Z are saving and investing more money than older Americans. Yet, there remains a considerable gender gap in money management behaviors among younger generations, according to a recent report published by payments firm Klarna.

While it’s encouraging to see that younger consumers are saving and investing at higher rates than the rest of the population, the visible gender gap within Millennials and Gen Z could potentially be a cause of concern for their long-term financial wellbeing.

(Note: Klarna’s report uses the following abbreviations to collectively refer to Millennials and Gen Z: YM = Young Men, YW = Young Women) 

Young men are more interested in personal finance than young women

Interest in personal finance among American consumers (source: Klarna)

Klarna’s report covers 10,000 consumers across nine different countries in North America, Europe and Australia, with over 1000 participants representing the U.S. market. 

Findings suggest that, with the exception of Finland, men in all other countries show more interest in personal finance than women. And while the majority of Americans have a high interest in personal finance, the U.S. is the country with the largest disparity in interest between men and women. American men show greater interest in personal finance than women across all age groups, including among Millennials and Gen Z (YM 64% vs. YF 54%).

Young men are investing more than young women

Percentage of Americans who invest their savings (source: Klarna)

The report finds that men in all nine countries invest a larger share of their money than women. Gen Z (42%) and Millennials (40%) in the U.S. invest at a higher rate than older demographics like Gen X (32%) and Baby Boomers (26%). However, the percentage of young men who invest their savings (40%) is much higher than young women (27%). Men tend to invest a lot more in currencies (YM 21% vs. YW 5%), commodities (YM 23% vs. YW 6%) and property (YM 31% vs. YW 10%).

Another interesting difference is that young men save up more for their retirement (YM 36% vs. YW 24%), while young women save more as a buffer for short-term, unforeseen expenses (YW 25% vs. YM 11%). This could potentially lead to greater disparity in the overall savings of young men and women in the long run.

Some of the above differences can perhaps be explained, at least partially, by the fact that there is unequal access to financial literacy between American men and women.

Source: TIAA Institute-GFLEC Personal Finance Index (2020)

A 2020 report published by TIAA asked men and women a series of questions about money management. The research found that women’s financial knowledge falls behind that of men in various functional areas, including saving, earning and borrowing. The difference was particularly noticeable in the realm of investing: men correctly answered 56% of the investment-related questions, while women only answered 43% of these questions correctly. This knowledge gap could potentially explain why young men are investing more actively than young women.


Young women use mobile apps to manage their finances more so than young men

Source: Klarna (note: this is an interactive chart. The online version can be viewed here)

The above chart shows how frequently American consumers use different channels for banking services. As expected, younger generations use mobile banking more often than their older peers.

Interestingly, the study also finds that young women in the U.S. use mobile apps to manage their finances more so than young men. 66% of women used mobile apps to check their balance compared with 56% of men, and 47% of women categorized their expenses using mobile apps, compared to only 37% of men. These differences also exist among Millennials and Gen Z: 61% of young women used mobile apps to transfer money, compared to only about half of young men (49.8%).

As the world begins to slowly recover from the economic uncertainty of the past year, financial institutions have the opportunity to facilitate and encourage women – who have been hit hardest by the pandemic – to save and invest a larger share of their earnings. Women’s greater use of mobile banking services also underscores the importance of making financial tools more accessible on smartphones and mobile devices. Providing easier access to saving and investing options on mobile apps could potentially help narrow the existing gender divide among younger consumers.

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