The Truth About Women and Debt

In media and popular culture, women are often pegged as the household shopaholic—buying shoes, clothes, and other luxuries that stretch family budgets. But while it's true that women do drive the majority of consumer spending in the household, the reality is they're not shopping just for fun; they're carrying the mental and financial load of making sure the home and family run smoothly, whether that's buying the kids' school supplies or a replacement toaster when the old one is on the fritz.

In fact, research has shown that women's relationship with debt isn't about frivolous spending at all. Instead, economic uncertainty brought on by the pandemic and a lack of universal maternal leave are compounding women's already heavy student debt burden. We spoke with money Coach Nika Booth from DebtFree Gonna Be about the realities of gender and debt—plus what we can all do today to create a level debt playing field for women and girls.

Personal debt is a feminist issue.

The debt burden in the U.S. falls disproportionately on women's shoulders, thanks to a number of factors beyond their control—from the gender pay gap and unpaid family leave to their disproportionate student debt balances. A report by the Education Data Initiative found that women are more likely to have high student debt balances and large monthly student loan payments—even though they make 26 percent less than their male counterparts. And despite the larger payments, women often take two years longer to pay off their loans.

Paid leave and child care are critical infrastructure.

Since the beginning of the pandemic, women have lost jobs or left the workforce at a higher rate than men, with job losses especially pronounced among women with a high school education and young mothers, according to a report by the Pew Research Center. In the United States, according to the American Association of University Women, "Many women cannot return to the workforce without holistically addressing the economic needs of families."

The AAUW has found that "over half of mothers who left their jobs during the pandemic reportedly did so because their child's school or daycare closed."

Even with daycares reopened and the job market recovering from the worst of the pandemic, the cost of childcare can be a big burden for working families—as the median cost of infant care tops the cost of public university tuition in more than half of the states in the U.S., according to the Economic Policy Institute. That can be a huge barrier for young parents staying in the workforce—and lead to increased debt.

Women shouldn't need disability insurance as a stopgap for unpaid maternity leave.

A July 2022 study from the online insurance broker Breeze surveyed 1,001 working women between the ages of 18 and 44. The findings were heartbreaking.

They found that 75 percent of women would have no savings left if they had an unpaid eight-week maternity leave—and the highest percentage of respondents said that an unpaid eight-week maternity leave would present a "major, possibly permanent setback" to their finances. Most parents do end up having to take unpaid leave, as only 25 percent of U.S. workers have paid family leave through their employer.

While disability insurance can be a beneficial stopgap, it is not a permanent solution. Even this service comes at a cost—sometimes hundreds of dollars per year—that is exclusively passed on to moms, not dads.

Take these three steps to level the debt playing field today.