In a world where men and women are supposedly equal, there is a shocking wage gap between gender. White women earn 84 cents for every dollar that a man makes, and for women of color, the gap is even worse. Latina women earn 55 cents for every dollar their white male counterpart earns.
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There is no denying that income inequality is a major issue in today’s society. But what many people don’t realize is that this disparity can have a big impact on one’s ability to obtain and repay debt.
For members of the LGBTQ+ community, this can be especially true. A study from Ohio State University found that transgender and non-binary students reported higher average financial strain and were more likely to have student loans than cisgender students.
Is there a difference between men’s and women’s finances?
Finance is not solely determined by someone’s genes or gender. Many other external factors play a role in financial management.
While women have made great strides in achieving equality, they still face many challenges. One of the biggest is the disproportionate amount of responsibility they bear for caregiving. This includes childcare and caring for elderly parents, which can negatively impact their lifetime earning potential. Women also tend to be more financially vulnerable after divorce. By contrast, men feel social pressure to exude wealth and status regardless of their actual success, and often go into debt to keep up appearances.
Trans and nonbinary individuals face greater obstacles than their cisgender counterparts when it comes to finding affordable housing. They often lack family support and have to take on more debt, making it difficult to find a safe and stable home. In 2020, federal protections were put in place to prevent housing discrimination based on gender identity.
Credit scores
After analyzing the credit scores of thousands of men and women from 2007–2017, it was found that men and women have nearly identical credit scores, but on average, men’s scores are slightly higher. Although there are many factors to consider when it comes to one’s credit score, this study provides interesting insight into possible gender disparities.
As of yet, robust data distinguishing the credit scores of nonbinary individuals is lacking.
Spending
As income increases, so does expenditure. Those who earn more tend to spend more money.
According to a study by the Bureau of Labor Statistics, single women in America earn on average $39,178 per year and spend $38,838. This is compared to single men who earn an average of $49,525 per year and spend $41,203.
There is a lot that goes into income and expenses, from the size of your family to the costs of living in your area. Unfortunately, there isn’t any data from the Bureau of Labor Statistics breaking down income and expenses for nonbinary individuals.
Investing
Women’s investment rates are lower than men’s, resulting in over $3 trillion less in assets being managed today. This discrepancy is due to several factors, including the gender pay gap and a lack of engagement among women investors. Because they don’t earn as much as their male counterparts, many women struggle to keep up with the cost of living, let alone invest money.
Borrowing
On average, women carry more debt than men do.
- Men have 2% more credit card debt than women
- Men have 20% more personal loan debt than women
- Men have 16.3% more auto loan debt than women
- Men have 9.7% more mortgage debt than women
- Women have 2.7% more student loan debt than men
When making decisions, do lenders consider gender?
Lenders are not allowed to discriminate against borrowers based on gender or gender identity.
Mortgage lending can often be discriminatory, especially when it comes to race, color, national origin, religion, sex, gender identity, sexual orientation, disability, and family status. Luckily, there is Fair Housing Act in place to help protect against this.
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Discrimination in lending practices is strictly prohibited by federal law. This includes any kind of discrimination based on race, color, national origin, sex, marital status, age, or participation in public assistance programs.
Women have always been at a disadvantage when it comes to securing loans and credit. In the past, lenders were allowed to require women to have a male co-signer in order to approve a loan. This made it nearly impossible for women to build credit, buy homes, or take out loans to start a business without a man’s help. While the Equal Credit Opportunity Act of 1974 made this discrimination illegal, prejudices from this era still carry forward today.
What should you do if you think you are being discriminated against financially because of your gender?
If you think you are being treated unfairly financially because of your gender or gender identity, it is important to gather proof. Try to take note of conversations and record them (where allowed by state law), as this can serve as valuable evidence. Email is often the easiest way to keep track of conversations, so use it whenever you can.
The best way to get help with a problem is to submit a complaint through the proper channels. Depending on your situation, you may need to go through a different agency.
- For housing discrimination, including mortgage lending and rental price discrimination: file a complaint through the U.S. Department of Housing and Urban Development.
- For credit discrimination including loans, mortgages, and credit cards: file a complaint through the Consumer Financial Protection Bureau.
- For any type of discrimination: file a report with the U.S. Department of Justice’s Civil Rights Division.
It’s important to check whether or not your state, county, or city has a civil rights division which you can file complaints with. By doing so, you can help protect yourself and ensure that you receive the justice you deserve.
Bottom Line
Your ability to manage money does not depend on your gender or whether you have certain body parts, but societal expectations and norms can still affect your income. We’ve made progress since 1974 when women couldn’t get their own credit cards, but there is still more work to be done. Nonbinary people face unique challenges in 2020, such as discrimination in housing, but we can create a more inclusive society for everyone.
