This article originally appeared in the May issue of the Callahan
Report. Free access of this article for non-subscribers of the Callahan Report is available
until July 17.
While women have made strides toward equal pay in the workplace since the founding of our country, the reality of the financial differences they face over their lifetime is still shocking. Studies have shown the money and finances are not gender neutral.
Understanding the facts can help a credit union gear products and information specifically toward women without seeming regressive or biased. Targeting women should not be based on stereotypes of women’s financial dependence or ineptitude, but should occur based on a recognition that many women have different economic circumstances than men and have a need for tailored financial planning.
Markets such as the underserved, youth and Hispanics are increasingly recognized as potential target groups that have identifiable needs that credit unions can meet. These efforts tie into credit unions’ founding purpose, and can positively benefit both the credit union and its members.
Women, however, are an often overlooked demographic. Fully 51 percent of the population and 46 percent of the national credit union member base, women represent a significant opportunity - as one credit union has already learned.
Women's Life Earning Realities
Women are set apart from men, financially speaking, due to a variety of economic and situational realities they will face during their lives. Specifically, there is a continuing disparity between men and women's lifetime earnings. Three primary factors contribute to the difference.
- First, women earn on average 25 percent less than men. In 2003, this meant that the median wage for full-time working woman was $31,653, while a man earned $41,503. This reflects a 0.6 percent decline in real median earnings for women from their 2002 level.
- Second, women are more likely to work part time. While the majority of working men are full time (73%), just over half of working women are full-time (58.7%). This employment pattern not only reduces women's hours and hourly rate, but also they qualify less frequently for employer-based retirement plans and contribute less to Social Security.
- Third, women typically spend less time in the work force. According to the Social Security Administration (SSA), women work a median of 32 years in contrast to men's median of 44 years in the work force. These facts lead to some staggering short and long-term results.
Financial Education Helps Women
According to a survey by The National Center on Women and Aging , "Over half of the women (52%) who had not yet seen a professional financial consultant said that they would like this type of help. These women wanted a consultant to bring a high level of expertise to their planning; help increase or protect their assets; confirm their goals or plans; and/or provide needed knowledge about the financial market and financial products."
The experience of New England Federal Credit Union (NEFCU) demonstrates this finding. Responding to a member focus group survey report that indicated female members were looking for more educational opportunities, NEFCU hosted its first seminar specifically dedicated to women's financial education. Topics included:
- Being proactive in managing your finances
- Elements of an investment portfolio
- Action steps to get started
The seminar attracted record attendance and even prompted the local hospital, one of NEFCU's primary sponsors, to ask the credit union to host a financial education seminar during National Nurses' Week. According to Susan Zahn, the credit union's business development manager, "It was awesome to see their reactions! The attendees said the seminar really shook them up and helped them realize their own need."
Credit unions have a unique opportunity to fill this space. As financial institutions both visible within their communities and trusted by their members, credit unions are an ideal delivery channel for women's financial education.
Fully understanding the differing and frequently dire situation many women find themselves in as they approach retirement is important and may inspire your credit union to act. Learn more about this important issue in the Callahan research report Innovative Education: Why Targeting Women is an Opportunity for Credit Unions.