By Maddie Duley, GoBankingRate featuring Julia K. Pham, CFP®, AIF®, CDFA®, Wealth Advisor
In light of March being Women’s History Month, GOBankingRates is taking a look at gender gaps when it comes to financial literacy and money matters in order to empower women financially.
According to a recent survey conducted by GOBankingRates, the majority of Gen Z women in the 18-24 range are not investing either because of a lack of money, knowledge or both. The survey also found that for 39% of women ages 18-24, inflation is the biggest source of their financial stress.
Here’s a closer look at where Gen Z women’s financial priorities — and insecurities — lie as well as some expert insight on how to start investing and navigating inflation as a Gen Zer.
Gen Z Women and the Investing Problem
GOBankingRates’ survey asked over 1,000 American women where they were investing their money. Surprisingly, a staggeringly high 61% of Gen Zers ages 18 to 24 are not investing. This age group topped all the others in this regard — with every other age group more likely to invest.
Gen Z women might be opting out of investing for a reason. According to the survey results 19% of young women ages 18 to 24 are not investing because they lack the knowledge to do so. However, the investing secret Gen Z women might not know is that they are likely going to be smarter investors than their male counterparts.
According to a survey conducted by Fidelity, women, on average, outperformed their male counterparts by 0.4%.
Despite women being better investors than men, many are not investing. With the majority of American women not feeling confident in their investment abilities, let’s look at some of the best ways for Gen Z women to get started investing.
Investing Tips for Gen Z Women
When it comes to starting something new — like investing — it’s best to start small and gradually work up to more high-risk investments.
Prioritize Saving For Retirement
A great place for Gen Z women to start is to invest in their future.
“If your workplace offers a 401(k) account, take advantage,” said Julia Pham, wealth advisor at Halbert Hargrove. “If they offer a company match, then try to save at least what they are willing to match and target an overall savings of 15% to 20% of your gross paycheck.”
Use Smart Investing Strategies
You might be wondering why women tend to get higher returns on their investments than men. One reason for this success could be women’s tendency to invest more conservatively. According to a 2022 Wells Fargo study, women take on 82% of the risk that men take on.
In light of women taking on fewer investment risks, there are some things Gen Z women can do to start investing without taking on high-risk investments.
“Keeping a diversified portfolio and investing for the long term will not only help manage risks, but it also means that if the market takes a dip, you still have plenty of time to recover.”
