Image by Gerd Altmann from Pixabay
Establishing a strong emergency fund is sound advice for anyone, but it’s especially important for women. According to Yahoo! Finance, more than half (57%) of women don’t have enough money set aside for unexpected emergencies, compared to just 44% of men.
Why does this disparity exist? There’s likely not just one reason, but several factors:
1. Careers Derailed by Traditional Gender Roles
Traditional domestic chores like childcare, cooking, and cleaning tend to fall on the shoulders of women. In many situations, these responsibilities are so great that women may switch career goals, accepting a part-time job that offers flexibility.
Women were disproportionately more likely to quit their jobs to look after children during lockdown. Bloomberg reports childcare still keeps women out of the workforce.
2. The Salary Glass Ceiling
Despite the great strides in shortening the gender wage gap, women — particularly BIPOC women — still earn less than men. According to one study, the average woman makes roughly 90 cents of every dollar a man makes. Visible minorities, meanwhile, make approximately 87 cents per dollar on average.
3. Lingering Student Debt Tightens Budgets
Today, women are more likely to be enrolled in university or college. While this is a win for female empowerment, it comes as a loss for their wallets.
Women are more likely to carry student debt than men as a result of their higher enrollment rates. About 61% of students carrying debt are women, and on average, women carry more debt per loan than male students.
When you’re responsible for large monthly debt payments, you have less cash available to contribute towards an emergency fund.
4. A Lack of Financial Literacy
Finally, it comes down to what you know. Study after study shows women, on average, are less likely to consider themselves financially knowledgeable than their male counterparts.
Given that this is a self-reporting test, their response could be imposter syndrome rearing its ugly head. Many capable women believe themselves unqualified or unknowledgeable in a variety of subjects, finances included.
However, it could reflect an honest lack of understanding of the financial world. These women may not know the danger of living without a sufficient emergency fund.
What Happens if You’re Facing an Emergency without Emergency Savings?
Without emergency savings, handling the unexpected is hard —but not impossible. The financial world supplies many different safety nets to help people (both men and women) pay for unexpected yet essential repairs and expenses.
A line of credit is a popular safety net in these emergencies. As the online lender Fora explains, a line of credit provides financial flexibility in tough situation. If approved, you may draw against a Fora Credit line of credit online as needed with no additional fees — just the interest on what you draw.
Establishing an Emergency Fund is a Must
Having a line of credit on standby is a great way to ensure you won’t get caught unprepared. But the emergency fund remains the single best way to handle unexpected expenses. You need to start contributing to this account.
Given the persisting problems from above, you might face more barriers to this task than men. Check-in with your career goals to see if you can make moves this year to bring home more money. These tips can help you save more:
Image by PublicDomainPictures from Pixabay
