Why Financial Literacy Should Be a Priority for Every Young Woman

The gender pay gap isn't the only type of financial inequality women face: there's an equally concerning disparity between women and men's financial literacy. Research has shown that women tend to have a lower comprehension level of financial topics than men — and the situation is even more dire for women of color.

When researchers asked women questions about concepts like saving, investing, and managing debt, Black and Latinx women answered only 38 percent of the questions correctly —16 percentage points below their white peers, on average. The same survey results found financial literacy was lowest among Gen Z women. Another study found that women also felt less comfortable making major financial decisions than their male counterparts.

This lack of financial literacy has real-world effects on young women of color, too. On average, women live five years longer than men — but also accumulate less wealth than men over their lifetime on average due to the gender pay gap, so it's crucial that they understand how to manage their money. In general, greater financial literacy is associated with increased financial wellness. Researchers don't know exactly why women tend to have lower levels of financial literacy than men, but they agree that addressing this gender gap is crucial.

The first step to closing the financial literacy gap? Creating an open dialogue around money. Talking about money remains taboo in our society — and asking someone how much they make, how much they spend on rent, or even how much student loan debt they carry is still widely frowned upon. If young women can't speak to their peers about finances, learning to manage their money effectively becomes even more difficult. That's why Secret is calling for the end of financial secrets: It's time to start having these important conversations and improve your financial wellness.

To help spread the word about financial literacy, Secret brought two women in personal finance —founder of The Finance Bar Marsha Barnes and personal finance author Berna Anat — to speak to HBCU students at the Ambitious Girl Fall Tour. They spent the day encouraging young women to invest their time into money management and dishing out advice — like why Barnes thinks college is the perfect time to start thinking about personal finance.

"Peer pressure is really real and competition is real. If you're anything like me, at that age, you wanted everything," she said. "Financial literacy allows you to better understand what you want for your life as opposed to what others have or what others are doing."

Both Barnes and Anat advocated for having open, honest conversations about money with anyone and everyone in your life — friends, family, coworkers — to try to remove the culture of secrecy and shame. "The more we talk about it, the more we are constantly learning and growing," Barnes said. Anat even suggested starting a group chat with your friends just for talking about money. "Anytime someone deposits money in their savings or does something good with their money, drop a money emoji in there. It encourages everybody else to participate," she said.

Being able to speak frankly about how you're saving, spending, and investing your money will help you feel more confident and comfortable managing your finances — something both women agreed is crucial to creating a healthy financial future for yourself.

"Money is the language of power in this world," Anat said. "Any amount of dollars in your pocket is your power. . . . Learn about your money, learn about your own self-worth and power in this world, and you're unstoppable."