How to overcome the gender debt gap

Women may accrue more debt than men. Here are some tips on how to manage it.

Debt is an issue that affects a large part of the population. Sadly, recent studies have shown women are more likely to amass debt than men, due to a range of factors. So, ladies, the stats might not sound favorable but the situation isn’t hopeless. Let’s take a deep dive into why women tend to accumulate more debt and tips on how to handle it.

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Why do women have more debt?

It seems there are three major factors as to why women seem to have more debt: student loans, the gender wage gap, and financial responsibilities.

According to AAUW’s research, women hold about two-thirds of student loan debt in the U.S. In fact, on average women hold a total sum of over $31,000. Upon graduation, women are still disproportionately underpaid, making 74% of what men make after they graduate from school. The U.S. Census Bureau also reports that women earn less than 82 cents to every dollar earned by a man. These factors can also get more dismal depending on race, socioeconomic status, and other factors. Paging Gloria Steinem.

All this has resulted in women not being able to keep up with bills. If you add on the cost of living that may include housing, car payments, child care, and other expenses, it can become nearly impossible to make ends meet.

We also can’t discount the economic impacts Covid-19 has had on finances. In the early weeks of the pandemic, women filed nearly 59% of unemployment claims, despite being only half of the labor force. Compounding that with living expenses, monthly bills, and student loans, there is a lot of debt falling onto women’s shoulders. 

How-to manage debt

Ok queens, now that we know the stats and facts, let’s dive into ways women manage their day-to-day expenses and higher bills like rent, mortgage, credit card bills, and student loans.

Organize and prioritize bills: The first step may be obvious but make sure to keep paper and digital bills in one place, to easily access and understand what is due when. Also, personal finance apps like Finovera allow you to download bills and link to creditors.

Consolidate: If your debt has become overwhelming, there are ways to consolidate bills. You can transfer bills to a credit card that offers lower rates for a specific amount of time or you can get a fixed-rate consolidation loan. If all the financial jargon is hard to swallow, you can talk to consolidation companies like National Debt Relief that will do the work for you.

Lower interest rates: Interest can be a big factor in increasing debt, especially if you’re not paying credit cards or loans on time. Lenders or credit card companies can sometimes negotiate a lower interest rate with customers, but, if this doesn’t work, you can also transfer balances to a lower interest rate credit line. 

Auto-payments: Having bills automatically deducted from your account is a great way to stay on top of them. Some companies will even lower a bill if you subscribe to auto-pay. However, make sure your account has the sufficient funds to be able to cover these payments because you don’t want to get a late fee if your account is negative. 

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Financial tracking apps: Budgeting apps like Mint and Pocket Guard can help you keep track of your spending and see where you might be overspending. 

Student loans: If you have multiple student loans, you may be able to consolidate them into one bill, which might help decrease your interest rates. If it’s a federal loan, it can be done through The Department of Education versus a private loan which would need to be refinanced. Also, if you have life insurance, you can add those loans to your coverage, so no one is on the hook for them (like cosigners).

Financial planner: Sometimes we just can’t figure things out. Working with a financial planner will help you understand how to manage your money and get back on track.

Plans for protection

While there is still work to be done, women can overcome these financial obstacles with smart planning, budgeting, and tenacity. Heads up: getting life insurance is also a great way to cover the things that are most important to you without leaving a burden for your loved ones.

We recommend the Wyshbox Wysh Builder tool where you can calculate the right coverage for your unique circumstances by listing the exact financial goals you have. And what’s really great is that since women tend to live longer and are considered lower risk than men, they usually pay less for premiums—silver lining! Also, getting life insurance sooner rather than later will definitely be better, since age and health determine your monthly cost.

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