Young women have been historically disadvantaged when building individual and generational wealth, often putting them financially behind their older (and usually male) counterparts. These disadvantages contribute to financial gaps like the gender investing gap—the imbalance between men and women on their investment returns over a lifetime. This gap makes a big difference in the financial well-being of women, and according to recent research from M1, it’s being challenged by younger generations like Gen Z.
Arielle Kimbarovsky is the senior content strategy manager at M1, where she leads content and social media. M1 is a personal finance platform made for the modern era, uniting individual perspective with automated ease.
Previously, Kimbarovsky worked in marketing for other startups, fintechs, and personal finance educators, where she focused on driving online communities, education, and engagement. She is passionate about helping people, especially historically marginalised groups, improve their financial wellness.
Speaking to The Fintech Times, Kimbarovsky explains why the gender investing gap exists, but also looks to the future on how it can be overcome:
Why does the gender investing gap exist?
Our relationships with money start at a very young age, often before we realise the impact. These experiences cover saving, spending, and investing—even the amount of risk and control we’re willing to take with our finances.
One example? Men grow up talking about money. Historically, they have been more likely to learn about finance as a viable career option and discuss money with their friends and family. Women, however, have been historically taught the exact opposite—socialised to consider finances (and investing) a taboo topic. One example: women had trouble opening a line of credit without a male co-signer until the Equal Credit Opportunity Act of 1974.
Stifling access and discussion has discouraged women from taking charge of their finances, causing them to invest less than men. This gender investing gap has created snowball effects in the gender wealth gap, gender retirement gap, and more.
And while money isn’t everything, it influences every aspect of life—our experiences, relationships, and future. We must close the gender investing gap, and younger women are actively moving us towards this.
Younger women are planning more than their male counterparts
According to research from M1, a financial tech company focused on helping people improve their financial well-being, younger generations of women are narrowing the gender investing gap through planning, research, action, and education.
Let’s take financial plans as an example. Among Gen Z investors, 63 per cent of women have reported having a written financial plan compared to 51 per cent of their male counterparts. Meanwhile, only 43 per cent of female Baby Boomers have written a financial plan—compared to 49 per cent of male Baby Boomers.
While writing a financial plan is more common for younger generations of men and women, younger women have pushed towards a more dramatic shift—and for a good reason.
Strong financial plans are the foundation for financial health and wellness. They cover everything from financial goals to retirement strategies, including a current understanding of your finances, your investments, and more.
As young women build financial plans, they become more engaged with their finances. This often leads to actions like learning about investing strategies and putting more money into the stock market. It also means they’re setting higher standards for their financial goals, thinking about how money connects to their overall life and wellness.
But creating financial plans isn’t the only way younger women narrow the gender investing gap. They’re also leading the charge in financial education for women.
Younger women are more engaged with financial education
The same research from M1 also revealed that Gen Z and Millennial women are more involved with their financial education than their older counterparts. In particular, younger women actively monitor rapid investing landscape changes, exploring different types of asset classes at an extremely high rate.
For example, when asked about plans to invest in alternative assets (crypto, private equity, hedge funds, real estate, and more), 91 per cent of Gen Z women said they had plans to invest in any of the above. In comparison, only 26 per cent of Baby Boomer women said the same.
Even more importantly, women’s increase in financial education sparks action. Communities like BFF, a web3 organisation dedicated to bringing more women and nonbinary people into the space, are multiplying. Online financial educators like Tori Dunlap of HerFirst100k (an M1 affiliate) are pioneering investing content specifically designed to speak to women.
Younger women are planning, educating themselves, acting on what they learn, and sharing their knowledge with others. This suggests that younger women aren’t just narrowing the gender investing gap for themselves; they’re doing it with future generations in mind.
Younger women are using better tools than ever before
It’s not just an increase in investing confidence and action that’s helping younger women narrow the gender investing gap. Technology is also giving them flexible levels of control.
Gendered perspectives on finance and investing cover more than education and community—they’ve impacted the tools people use.
For women especially, complex, manual, fee-heavy tools have made narrowing the gender investing gap even more difficult (it’s hard for anyone to invest when tools are complex). But features like automation, education, and pre-built portfolios are helping younger women engage with their finances and pave the way towards more equitable levels of financial wellness.
The best part is that better tools don’t just help women; they make financial wellness more accessible to all. Combined with representation, conversations, education, and planning, money management tools are another way younger women are closing the gender investing gap.
Why narrowing the gender investing gap matters
Money contributes to and enables our overall well-being. Younger women understand that building their financial wellness through investing means ensuring their comfort, safety, and happiness equals their male counterparts.
Narrowing the gender investing gap means women are better set up for milestones like homeownership and retirement. It changes attitudes about investing and engaging in financial planning. And it creates a more equitable opportunity for all genders to have the financial flexibility and future they want.
Research shows that younger women are taking the lead in narrowing the gender investing gap. Future actions will show how others are supporting them.