No one enjoys credit and money problems. Stress, financial issues, and bad credit quite commonly go hand in hand. However, new research from Elevate’s Center for the New Middle Class shows evidence that women may feel the hardest hit where financial stress is concerned.
The study suggests that non-prime women, defined as women with credit scores lower than 700, may be the most financially vulnerable group in the United States. Women in this category face a lot of challenges. They work more than women with higher credit scores. They are more likely to be the primary caregiver for children or elderly parents living in their home. Most of these women also tend to be the head of their household, at least from a financial management standpoint.
It is no surprise that over half (56% to be exact) of the women in this sub-prime credit score category say that their finances cause them significant financial stress. On the flip side, only 45% of men with sub-prime scores say the same.
As mentioned above, a significant portion of non-prime women are caretakers, a possible cause of the increased stress. After all, when you feel responsible for not only your own financial well being but the financial wellbeing of others, it tends to pile on the pressure. Non-prime women are 41% more likely to have children in the home and 79% more likely to have an elderly parent living with them when compared with women in the prime category (credit scores over 700).
Here are a few other highlights from the study:
Non-prime women are 4 times more likely to have trouble predicting their next month’s income when compared with prime women
They are 20% more likely to work full time when compared with prime women
2/3 of non-prime women admit to living paycheck to paycheck
They are less likely to have savings set aside for emergencies
More than 4 out of 5 non-prime women run out of money at least once per year
They are 24% more likely to say their finances cause them stress when compared with non-prime men
They are 6 times more likely to have used a payday loan
Non-prime women are more likely to manage their family’s finances, including checking account, financial planning, and making decisions for major purchases.
One thing is certain. Non-prime women, and really women in general, need more support when it comes to their finances and credit. Although a number of studies have shown that women are the primary financial stewards of their households, many women still doubt their ability to manage their finances well. When asked to rate whether they believed they “have the skills and knowledge to manage their finances well, only 39% of non-prime women agreed with the statement.
“Everyone talks about how women’s financial situations lag behind those of men. However, we often forget that non-prime women have it even harder,” said Jonathan Walker, Executive Director for the Center of the New Middle Class. “When compared to prime women and non-prime men, non-prime women are faring worse than both groups. The data tell a story of women’s increased burden, increased responsibility, and increased need for help. It’s more important than ever to arm them with the tools they need to improve their finances,” continued Walker. “Financial literacy training, coupled with the right financial products, could have tremendous societal benefit not only for non-prime women, but also for the next generation.”