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Women's financial health is at a 5-year low

MICHEL MARTIN, HOST:

This week, the Federal Reserve ordered another big jump in interest rates. It's the fifth time the central bank has raised rates this year, and more rate hikes could be on the way. The idea is that if it costs more to borrow money, prices will cool down. But many Americans are already feeling the pressure of high prices, and that pressure is not being felt equally. So we thought we'd take a few minutes to think about how current economic conditions are affecting women. For that, we called Sallie Krawcheck. She has decades of experience in investing and financial management. She's now CEO and co-founder of Ellevest. That's an investment and financial literacy platform aimed at helping women reach their financial goals. And she's with us now.

Sallie Krawcheck, welcome back. Thanks so much for joining us once again.

SALLIE KRAWCHECK: Michel, happy to be here.

MARTIN: So we called you for a couple of reasons. One is that we know that men and women often have very different economic profiles. I mean, we know, for example, that women hold nearly two-thirds of student debt. For example, women were more likely to reduce their working hours or quit during the COVID pandemic. And the second reason we called you is because you've been studying women's financial health. I mean, you found that women's financial health in a survey that you just published is tracking at the lowest level seen over the past five years. So before we dig into that, I wanted to ask, how have you been studying women's financial health? What's your survey designed to monitor?

KRAWCHECK: So we interviewed something like 2,500 people across the country, across age demographics. We interviewed a bunch of men as well to find out what has been on their mind. And at the same time, we constructed the Ellevest best financial health survey, women's financial health survey, to take a quantitative look at the factors that are impacting women's financial health and how they are doing. And we came to it with the point of view of we know they were hit during the pandemic by leaving the workforce early or being forced to leave the workforce. And that was tough. In this iteration of what's happening in the economy, inflation is really hurting them. And inflation hurts everyone - tends to hurt women more because they have less wealth, tends to hurt women of color even more because they have less wealth. And what are these factors that can be impacting women's financial health?

And we found that, given what's been going on with inflation, consumer confidence, the market correction, but also the fall of Roe v. Wade, which is an economic and financial issue for women as well, that their financial health is at the lowest levels it's been tracking since we can go back and look at the data, about five years ago, and worse even than during the pandemic.

MARTIN: First of all, you say in the survey that women - that inflation concerns both men and women. I mean, that seems logical. But you write that women are out-worrying men when it comes to how often they actively worry about money. And this is, like, a big gap. Why do you think that might be?

KRAWCHECK: It's because I think women have less money than men do, that when you have less, you have to think about how you're going to spend every dollar, how you're going to save every dollar. Inflation cuts into it much more quickly if you have less money that's put aside. The other thing I think that's also going on, Michel, is that women have different financial goals than men do. I was very interested to see that when you asked men what their No. 1 financial, goal is, it's about themselves. It's about saving for retirement.

For women, they put their family first. Their No. 1 financial goal has to do for investing and saving for their family. And so women, because of those societal expectations, you know, have a greater weight on their shoulder. And what sort of breaks my heart here about this is that women, of course, spend more years in retirement than men do. And so all things being equal, we'll need to save more for retirement than men will.

MARTIN: One of the other things you pointed out is that older women - and by that you mean baby boomers and Gen Xers - and younger women - millennials and Gen Zers - were worrying about different things. And I found that fascinating. What did you see there?

KRAWCHECK: Oh, my gosh. Absolutely. So we found that the older women are acutely concerned about inflation, that boomer women - it's like 91% rank this is as a top-five concern of theirs, very concerned about recession. These are the top things for them. When you look to younger women, they're worried about those two, but they are much more likely to worry about economic issues such as childcare costs, such as the impact of a reduction in their reproductive rights, such as women's representation in government. And so you look at the younger women, and they seem to be more concerned about these macro type of issues that are occurring.

MARTIN: Can I just jump in right here and ask about that?

KRAWCHECK: Yes.

MARTIN: Because I just think it's very unusual for people to list reproductive rights as a financial worry - now, obviously, because the political context has changed. You know, before the Supreme Court ruled in its recent decision, it was considered a settled issue. So perhaps that wasn't something that would have surfaced. But it just is interesting to me that how people identified that as a financial worry.

KRAWCHECK: Well, I think young women are pretty savvy and are talking to each other and seeing the social posts about it and connecting with each other. And so what we're seeing amongst women is more than 50% are saying that this has had a impact on their mental health. Fifty-six percent of millennial women are saying the fall of Roe v. Wade has had an impact on their mental health. And it's pervasive because women then say, OK, what does that further mean? I'm worried about myself, but I want more from my company. And so 44% of women are saying that they would consider leaving their current employer if the company's values on reproductive rights do not align with their own. Two-thirds of women - of young women - say that it's important for them to align their spending with companies that support reproductive rights and their views on reproductive rights.

MARTIN: So before we let you go, because, you know, you, for so much of your career, specialized in financial literacy and financial wellness and working with people to meet their goals. You've already laid out for us that people are situated differently, and they have different needs, priorities and problems. But are there things that you are particularly urging women to do to prioritize their financial wellness, given all the things you've talked about?

KRAWCHECK: Well, it's interesting because in many ways, women are doing exactly the right things right now. So we see as they are facing this inflationary environment, potentially recessionary environment, that two-thirds of women have cut back on spending, which is several percentage points more than men have. Now, frankly, not enough women are investing because they don't have as much money as men do, but when they are, they're doing the absolute right things. And what we find is that, you know, on any given day, money is women's No. 1 source of stress.

By taking these actions, by being proactive around their money to the extent that they can be, by making their decisions about we're going to cut these many subscriptions, we don't need this many streaming services - those actions can be stress relieving, you know, that sense of sort of taking control where they can, and having the impact they can on other women and other families, such as through voting, but also through impact investing.

You know, we're seeing even during the course of this downturn that women are continuing to invest in companies that are fighting climate change, in companies that, you know, are investing in a sustainable way. And so they continue to do the right things. The macro thing that's hard to get through, Michel, is they just don't have as much money as men do. And so they're making the right moves. But, you know, if we could just get more money, you know, into the hands of women, which is Ellevest's entire mission, you know, a lot of these things, you know, get better quickly.

MARTIN: That's Sallie Krawcheck. She's the CEO and co-founder of Ellevest. That's an investment and financial literacy platform designed to help women reach their financial goals. Sallie Krawcheck, thanks so much for joining us once again and sharing these insights.

KRAWCHECK: Thank you, Michel. Transcript provided by NPR, Copyright NPR.