This week, I bring you good news and bad news, both of which come from a study by the folks at Financial Finesse. For three years, they've been analyzing the gender gap in financial literacy. The bad news is that after some progress in 2011, the gap appears to be widening in 2012. Women are falling behind, specifically when it comes to money management and investing.
Only 43% of women reported having an emergency fund in place (compared to 63% of men) and just over half felt comfortable with the amount of non-mortgage debt they were carrying (compared to 71% of men). About half of the men surveyed say they rebalance their investment portfolios, while among women, it was only a quarter.
Now for the good news: Women are slightly more likely to report participating in their employer's retirement plan, says Liz Davidson, CEO and founder of Financial Finesse. "We're doing a better job with some of those longer term issues, and at least at the rate we're participating, we're in line with men there. That hasn't always been the case."
That, of course, doesn't mean we're contributing the same amount in dollars and percentages, which is the next hurdle to tackle. "We ideally should be contributing more than men, because we live longer. And that makes the gap even more concerning, because women have pressures that men do not have," says Davidson.
One of those pressures: A high likelihood of having to be solely responsible for our own finances at some point. The National Center for Women and Retirement Research reports that nine out of 10 women will end up in this position, either after a divorce or the death of a spouse.
Those possibilities are no fun to think about, but you'll feel better if you prepare for the unexpected. Here's how to start.
• Put yourself first. We have a problem doing this in general, not just financially. If you don't prioritize yourself, you'll put the needs and wants of your family over your own -- whether that means saving for college or buying your teenager those pricey shoes has to have. One easy fix is to set up the contributions to your retirement account -- a 401(k) if you have access to one; an IRA if you don't -- so they are pulled automatically every month. Do the same for an emergency fund. That money is off limits.
• Get risky. Women are more likely to avoid risky investments -- recent research from Northwestern Mutual showed that 44% of women prefer lower risk choices, compared to only 35% of men. But low risk often means low return, and any gains you do see can be eaten away by inflation. It's important to have a good mix in your portfolio -- both equities and safer investments like bonds.
• Find (good) help. We're not afraid to ask for help, which is great. But often, that help arrives in the form of a financial adviser spewing jargon that does us no good, because we don't really understand it. I've said this before: If your financial adviser can't explain things in plain English and answer your questions, it's time to find a new one. Ask friends and co-workers for recommendations, meet with a few of advisers, and then go with your gut instinct.
• Do your own research. Maybe CNBC is intimidating to you. That's fine -- I'd tend to agree. But there are a ton of websites (like this one) and books (like my latest, Money Rules) that break down financial information into manageable pieces. Find one that speaks your language.
The Worst-Paying Cities for Women
Listen Up, Ladies: Tips for Closing the Financial Gender Gap
Women's pay as % of men's:72.6% Median income for men: $51,124 Median income for women: $37,101
The city of Palm Bay's largest employers include several manufacturers of durable goods -- a sector notorious for being among the worst when it comes to paying women equal wages -- or hiring them. According to the Department of Labor, only 1.5% of operating engineers and other construction equipment operators are women, one of the lowest rates among all occupations.
Among those durable goods firms are semiconductor maker Intersil, electronics manufacturer MC Assembly, defense technology company DRS Technologies, and the Melbourne-based communications equipment company Harris.
Interesting note: The Palm Bay metropolitan area is completely out of step with the rest of Florida, which overall has the lowest rate of pay inequality in the country.
Photo of Melbourne, Fl by Wikipedia Commons
Women's pay as % of men's:72.6% Median income for men: $53,608 Median income for women: $38,890
Two other sectors with some of the worst gender income gaps are also among this region's largest employers: the health services and social assistance industry -- in which women earn just 71.8% of what men do -- and the consumable goods sector, which pays women, on average, 73.8% of what men get for the same jobs.
Some of the largest employers in the area are Lehigh Valley Hospital and St. Luke's Hospital, chemical company Air Products & Chemicals and energy company PPL, according to the Lehigh Valley Association of Realtors. The area is also home to a number of large food producers, which are included in the nondurable goods sector.
Photo of Allentown, PA by Wikipedia Commons
Women's pay as % of men's:72.4% Median income for men: $44,908 Median income for women: $32,514
This metropolitan area is well-known for its forest products industry (part of the nondurable goods sector): It's home to Idaho Pacific Lumber Company, paper company Boise Cascade and Idaho Timber. But within the past couple of decades, Boise's technology sector has emerged as its largest industry, dominated by employers such as Hewlett-Packard and Micron Technology. Women, on average, earn less than 75% of what men do in the durable goods sector
By state, Idaho ranks 39th for earnings inequality by gender.
Photo of Boise City by Boise City Facebook
Women's pay as % of men's:72.4% Median income for men: $45,273 Median income for women: $32,753
Chattanooga is home to a particularly large manufacturing industry. According to the city's website, the largest manufacturing employers in the metropolitan area are McKee Foods Corporation, Synthetic Industries, and home appliance company Roper.
Photo of Chattanooga by Chattanooga, TN Facebook
Women's pay as % of men's:72.1% Median income for men: $50,101 Median income for women: $36,126
Colorado Springs' economy is built on health care, the military, tourism and the high-tech industry. The city's two largest employers are Memorial Health System and Penrose-St. Francis Health Services, and among its other large employers are high-tech manufacturer Atmel, defense contractors Northrop Grumman and Lockheed Martin, and communications company Verizon Business.
While Colorado Springs does poorly, Colorado overall does relatively well, ranking 13th among all states when it comes to equal pay.
Photo of Colorado Springs by Wikipedia Commons
Women's pay as % of men's:71.8% Median income for men: $70,605 Median income for women: $50,714
This metropolitan area is one of the wealthiest areas in the country, with a median household income of $74,831. The national average is $50,046. Disparity, however, affects the wealthy just as much and women in the area earn just 71.8% of what men do, on average. The area's largest employment sector is health care, with Bridgeport Hospital and St. Vincent Medical Center the two largest employers. Although there are many more women than men in the health care and social assistance sector, men's salaries are significantly higher.
Bridgeport is also a major center for investment management companies. UBS employs 4,000 people in Stamford - the largest amount in the region. The finance sector is the absolute worst industry when it comes to income inequality between the genders.
Photo of Stamford by Wikipedia Commons
Women's pay as % of men's:70.6% Median income for men: $46,648 Median income for women: $32,926
According to the Augusta Convention & Visitors Bureau, the largest industries in the area are health care, the military and manufacturing. The top employers in the city are the nuclear reservation Savannah River Site, the U.S. Army Signal Center and Fort Gordon, and the Medical College of Georgia.
Photo of Augusta by Augusta, GA Facebook
Women's pay as % of men's:70.0% Median income for men: $49,739 Median income for women: $34,817
Among the Toledo metropolitan area's largest employers are ProMedica Health Services, Mercy Health Partners, and Chrysler Holdings, which built its Toledo Assembly Complex in the city. The city's largest industries are manufacturing, health services, and education.
Photo of Toleda by Toleda, OH Facebook
Women's pay as % of men's:64.4% Median income for men: $51,766 Median income for women: $33,331
Government, education, and manufacturing are this metropolitan area's largest industries. Public administration and manufacturing are both highly imbalanced sectors when it comes to gender pay equality. The city of Ogden's largest employers are the Department of Treasury, Weber State University, automotive safety product manufacturer Autoliv, and McKay Dee Hospital. Utah, on the whole, performs poorly compared to other states with regards to equal pay, ranking third-worst in the country.
Photo of Ogden by Ogden, UT Facebook
Women's pay as % of men's:63.4% Median income for men: $51,103 Median income for women: $32,385
On average, a woman working full-time doesn't even earn two thirds of what her male counterpart earns in the Baton Rouge metropolitan area. According to the Baton Rouge Area Chamber, the city's largest employers are industrial construction company Turner Industries, the Louisiana State University System, engineering, procurement, and construction conglomerate Shaw Group, and industrial contractor Performance Contractors. Although LSU is an outlier, the other companies paint a picture of an industrial-leaning economy. The state of Louisiana also has the nation's greatest pay disparity overall, with women earning 67.2% of what men do.