Despite having less support, women outpace men in financial independence

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In April, Merrill Lynch and Age Wave teamed up again and released the report, “Early Adulthood: The Pursuit of Financial Independence.” The findings show fascinating insights into the financial lives of millennials as they grow into early adulthood. Although the report did not specifically focus on women as a group, it did pick up on some interesting findings about millennial women. Specifically, women are outpacing men in financial independence, even with all of the hurdles they have to jump.

Women hold two-thirds of student loan debt

You’ve certainly heard about the $1.5 trillion in student loan debt that is spread out across 44 million borrowers. Since 1975, the average annual cost at a four-year institution has more than tripled, and the percent of 25- to 35-year-olds with student loans has doubled. Student debt has increased by nearly 500 percent since 2003 alone. 500 percent! Women, who are more educated than ever, hold two-thirds of that student loan debt.


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This means that on average, debtors will have to allocate nine percent of their salary towards their student loan debt every month. That is often an amount that prohibits them from contributing to other goals, like investing in retirement or buying a home.

Women get less financial support

An interesting finding of the report is that many young adults are getting financial support from their parents into their 30s. Even more interesting is that 75 percent of respondents defined adulthood as being financially independent from their parents.

However, the report found that women (49 percent) are less often getting this support than men (62 percent) are. To get more detailed, women are around half as likely to receive support across nearly all expense categories, including groceries (40 percent of men, 23 percent of women), rent (33 percent of men, 15 percent of women), vacations (36 percent of men, 17 percent of women) and student loans (32 percent of men, 14 percent of women).

This discrepancy in parental support isn’t necessarily a bad thing, in women’s eyes. In fact, women believe more strongly (70 percent) than men (57 percent) that continued financial support is a bad idea because it makes them dependent on their parents.

Women invest better, but less

This research found that women are more likely than men to list investing in their retirement and paying off debt as their top financial priorities. They are also less likely to withdraw from their retirement accounts early. This means that they are typically more responsible when it comes to their investing behaviors.

However, the women surveyed are less likely than men to hold investments outside of employer-sponsored retirement plans, and they are half as likely to be working with a financial advisor. This means that they are investing less money over time (plus, thanks to the wage gap and higher student loan debt, there is less money to be investing in general).

Women are less confident about investing

Young women report having less confidence than men in managing their investments. In fact, 41 percent (versus 28 percent of men) say their biggest fear about investing is not about market volatility, but not feeling that they know enough about what they are doing. This can result in women taking longer to begin investing as they begin their careers, which will hurt them in the long run by reducing the amount they have saved by the time they reach retirement age.

Women are progressing faster

Despite their debt load, the lesser likelihood for parental support, and lower confidence in investing, women are actually progressing faster and more successfully than men are. This applies across the board to education, career, and financial independence. More women are graduating from college and grad school than men, and women’s labor force participation is increasing, while men’s has been slightly declining. As mentioned earlier, women also more often believe that they should prioritize financial independence from their parents, and more of them have achieved that.

I would love for the women reading this to see these findings as proof that they are capable of financial security. Women are typically less confident about their financial decisions than men are, without real cause. In fact, these findings show that women are able to move forward in their lives more quickly and more successfully than men are, even with the many hurdles that are put in their way. The next time you’re feeling insecure about your abilities, remember that.

This piece was originally published on my ForbesWomen column.