Nobody likes taking on debt and having additional monthly payments take a bite out of their hard-earned paycheck. However, a survey from student loan refinancing company Comet illustrates that women are getting hit harder with debt than their male counterparts.
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What the Survey Says About Women and Debt
Comet surveyed 1,007 people about debt and regret and found a number of data points showing how debt affects women on a larger scale.
The survey results showed that women were more likely to report having credit card debt — 70 percent compared with 59.6 percent for men. When it came down to amounts of debt, women had significantly more student loan debt than men — $30,716 compared with $24,323. Not only that, but women owed more on credit cards, medical bills, and cars.
To make matters worse, women seemed to have more instances of regret in nearly all categories of debt. So not only are women taking on more debt, but they also tend to be unhappy with it.
All of this is to say, debt is yet another problem we must address in the fight for women's equality. But why would this be?
Why Debt Affects More Women Than Men
The Comet survey results mentioned that one of the reasons more women than men could be dealing with higher amounts of debt is the gender pay gap. According to the National Center for Women and Families, women earned approximately 82 cents to every dollar a man made. For women of color, it’s even less.
It makes sense that if women are earning less, they may take on more debt.
“In addition to the challenges of generally lower earnings there are behavioral factors that contribute to debt differences. If there were no behavior differences, we would expect no gender difference in per-person college debt,” explains Peter Neeves, Ph.D, a financial expert at CentSai. “Behavior differences are also likely in other debts, with women more likely to incur debt for security, such as for a dependable car.”
So there’s the wage gap and potentially different behavioral patterns, as well. Perhaps some women spend more for security or, in some cases, just to keep up with appearances — literally.
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There is so much pressure on women to look and dress a certain way, and the cost of beauty can be high. On top of that, women face paying a pink tax. In other words, they pay more for “women’s products” when those same products are more affordable for men.
“I think it all starts in college,” says Brynne Conroy, author of The Feminist Financial Handbook. “According to the AAUW, 56 percent of college students are women, and they tend to take on more student loans than men — possibly because outside family obligations stretch out the period of time it takes for us to earn our degrees. This trend is particularly pronounced for African-American women — one of the most highly educated demographics.”
Conroy also notes that women tend to be financially responsible for more people, often serving as caretakers for children and elderly parents.
All of these factors together create a troubling recipe that leads to more debt and more inequality for women. The implications in the long run are disheartening at best and downright scary and unsustainable at worst.
“The long-term ramifications are very significant,” says Neeves. “Higher debt levels and lower incomes restrict women's ability to save for retirement or accomplish other financial goals.”
Tips for Paying Off Debt
If you’re a woman reading this, it's easy to feel discouraged by the data. You might not be surprised by it, either. Fixing the gender wage gap requires governmental support and major changes in the workplace. That said, there are things you can do to work toward paying off debt.
1. Look at the Numbers
You want to know how much total debt you have across the board. Understanding where you are will help you tackle your debt.
2. Pay Off High-Interest Debt First
In order to save money on your debt, pay off your high-interest debt first while making the minimum payments on the rest. This strategy is commonly referred to as the “debt avalanche method.”
3. Make Biweekly Payments on Your Student Loans
Did you know that interest on your student loans accrues daily? If you cut your payment in half and make payments biweekly instead of monthly, you could pay less in interest without making bigger payments.
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4. Pay More Than the Minimum
Minimum payments are just a benchmark. If you can afford to pay more each month, then pay what you can to get out of debt faster.
5. Use Windfalls to Fund Debt Repayment
If you come across extra cash from a windfall like birthday money, a tax refund, or anything else, put it toward debt.
6. Consider Refinancing, Consolidating, or Using a Balance Transfer
Interest can make it tough to pay back debt. That’s why refinancing your student loans or using a balance transfer credit card can help. You're essentially lowering your interest rate to put more toward the principal. This only works when you’re committed to not taking on any more debt and when the promotional period or repayment terms work in your favor.
In order to pay off debt, work to limit your expenses, earn more money by side hustling or negotiating, and make consistent and additional payments when you can.