Different individuals and employers determine the definition of financial wellness in a variety of ways. In an effort to account for those discrepancies, Bank of America/Merrill Lynch recently released a study of financial wellness as a general concept and how employer-sponsored programs factor into employee evaluations of their own status.
In the report of their findings, BoA/Merrill Lynch did demographic-specific evaluations in an effort to ascertain how different groups think about their financial present and future. According to their findings, women feel less “financially well” overall than men, with 47% claiming that they feel less established with money than they’d like (the number for men in this position is 29%).
BoA/Merrill Lynch also discovered that employees who feel insecure about their financial stability place their primary focus on short-term goals, while those who feel comfortable with their fiscal situation hone in on long-term goals. And while the study doesn’t make specific correlations between the fact that less financially healthy participants have goals that are more immediate and the amount of women who identify as less financially healthy, it’s hard to ignore.
What can these findings teach us about the self-evaluations of women in the workplace in 2018?
Women feel less secure about their financial health than men, so they may not feel equally empowered to place their attention on long-term pursuits.
The BoA/Merrill Lynch study presented a major link between self-perceived financial security and the tendency to invest time and energy toward setting and fulfilling long-term goals. For example, 39% of employees who feel financially well consider good savings habits a crucial goal, while only 30% of less-secure employees feel the same way. On the flip side, 30% of less-secure employees count paying regular bills and day-to-day expenses among their biggest financial concerns, as opposed to only 18% of financially-well employees.
Because more women than men count themselves among the group that doesn’t feel financially well, it begs the question: Do women as a whole feel less comfortable focusing on long-term goals than their male counterparts? It’s not an outlandish conclusion. Those who need to direct their attention to daily concerns and short-term financial conditions don’t have the luxury of putting time and money toward big-picture aspirations. If, as the study suggests, fewer women see themselves in a position to focus on macro goals, it could have larger implications for the way that many women in the workplace view their career trajectories.
The income inequalities between men and women connect to the imbalance in perceived financial security.
According to the BofA/Merrill Lynch report, men in 2018 possess an average of $196,000 in investable assets, while the average for women only stands at $119,000. According to the Institute for Women’s Policy Research, women and men won’t receive equal pay until at least 2015. And because income inequality still exists between the genders, men as a whole have the ability to set aside a larger nest egg for themselves, which contributes to their greater sense of financial stability.
With a larger percentage of women feeling uncertain about their economic status due to income inequalities, long-term goals can easily be left on the back burner. This can hinder career growth and the economy at large. One way to fix the issue? Focus on pay equality and make women feel more confident in their economic standing.