Women and the Financial Literacy Gap

You may have heard that women are less financially literate than men. A quick Google search for “financial literacy gap” finds multiple references. Test yourself with this short quiz developed by researcher Annamaria Lusardi (1).

  1. Suppose you have $100 in a savings account and the interest rate is 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know

  1. Imagine that the interest rate on your savings account is 1% per year and inflation is 2% per year. After 1 year, how much would you be able to buy with the money in this account?

a) More than today
b) Exactly the same
c) Less than today
d) Do not know

  1. True or false? “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”

a) True
b) False
c) Do not know

Lusardi and her colleagues found that in the U.S., “Less than half of respondents correctly answered the interest rate and inflation questions and only one-third were able to correctly answer all three questions…Most important, women are much less likely than men to correctly answer.”  Women were also more likely to indicate that they did not know the answer.

A follow-up study(2) revealed that when “Do not know” was eliminated as an option, women often picked the correct answer. The findings imply that some of the financial literacy gender gap can be explained by women’s lack of confidence in their knowledge.

This indicates that improving women’s financial literacy needs to be approached in multiple ways. Women do need to learn more about financial concepts, and they also need practice and other means to develop the confidence to put their knowledge into action.


Know your situation. Don’t rely on significant others to manage your finances. Make an inventory of all your bank and investment accounts. Access and review account statements.

Become educated:

Get professional help. An hour or two with a fee-only financial planner (not someone who makes a commission by selling insurance or investments) is a smart move for your future.

1a – More than $102
2c – Less than today
3b – False


  1. Tabea Bucher-Koenen, Annamaria Lusardi, Rob J. M. Alessie, and Maarten C. J. van Rooij.  How financially literate are women? An overview and new insights. February 2016. Global Financial Literacy Excellence Center (GFLEC).  https://gflec.org/wp-content/uploads/2016/02/WP-2016-1-How-Financially-Literate-Are-Women.pdf?x74219 (accessed April 2021).
  2. Tabea Bucher-Koenen, Annamaria Lusardi, Rob J. M. Alessie, and Maarten C. J. van Rooij.  Fearless Woman: Financial Literacy and Stock Market Participation. March 2021. Global Financial Literacy Excellence Center (GFLEC). https://gflec.org/wp-content/uploads/2021/03/Fearless-Woman-Research-Final.pdf?x27564.