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How to Overcome Financial Literacy Gaps and Reduce Debt

Are you and your spouse doing all you can to reduce debt? Do you both contribute to the family finances? In the spirit of International Women’s Day this month, we wanted to shed some light on a few financial stats and offer ways that women can overcome them.

Which financial challenges are unique to women?

Over the past five decades, women’s financial contributions to their families have significantly increased. However, there are gender gaps that create an imbalance between men’s and women’s income overall. According to findings from Stats Canada and our Affordability Index, some factors that contribute to this include:

  • Women are more likely than men to take time away from work in order to raise children or care for family members.
  • Women tend to be overrepresented in lower-paying occupations.
  • Women struggle more with affordability, especially when it comes to buying a home, saving up for major purchases and covering transportation costs.
  • Women who earn less income than their partners have lower financial literacy scores and lack money confidence.
  • Women are more likely to carry heavier debt than men.

 

Women face significant challenges at all ages and stages of life. Young women struggle with financial independence and being able to afford life milestones such as marriage, starting a family and buying a home. Mothers, who take a short or longer time period away from work to care for their children can struggle with higher debt and low affordability as their household adapts to a lower stream of income. And finally, as women age, factors such as divorce, death of a partner or insufficient retirement funds can lead to higher instances of poverty.

How can women overcome financial obstacles and reduce debt?

If you’re feeling less than confident when it comes to making money decisions, now is the time to turn that around. Here are three ways to boost your financial literacy:

  1. Check out the Financial Consumer Agency of Canada (FCAC) website

No one is born with financial skills. You absorb many money attitudes from your peers, parents and even your spouse. That doesn’t mean you can’t change your mindset and learn new skills. A good place to begin is your monthly expenses. Are you spending more than you’re making? The FCAC provides a huge resource library to help you improve your financial literacy, no matter which stage of life you’re at. You’ll find out how to create a budget, pay off debt, reduce spending and set achievable financial goals.

  1. Deal with your debt head-on

You might think it’s easier to look the other way, but that debt is probably adding stress to your relationship and eating up your paycheques. Carefully go over your credit card statements and tally up your debt balances. Use a debt calculator so you have a good grasp of your situation.

Now, time to look at your debt repayment options. You might take the DIY approach by consistently putting money toward each debt until it’s paid, or you can compare more formal options using a repayment calculator to see the best path for you to take. The point is, if you’re not managing well and you’re experiencing affordability issues, it’s time to find a solid way to reduce debt.

  1. Use all available resources to help you manage money and debt

With all the information out there about personal finances, it can be a little overwhelming to know what to choose. Instead of filling your daily social media channels with people and ads that hinder your financial success, give these a try:

The Sudbury Star’s money column has a lot of great personal finance resources that will help you get on track.

The personal finance blog Simply Frugal offers straightforward money advice along with daily coupons to help cut costs.

Our Twitter feed, @BDODebtSolution, will help you connect with the online personal community, which in turn can help you reduce your debt and stay on top of your financial health. To join the conversation, don’t forget to include the hashtags #LeaveDebtBehind #WomenAndMoney #FinancialLiteracy



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