Helping Women Take Charge of Debt

It’s hard to believe that a mere 29 percent of American women would give themselves an “A” when it comes to managing their debt, according to a 2014-2015 Prudential Research Study. Another survey commissioned by National Debt Relief found that, on average, women tend to carry more credit card debt than men. This could be attributed to the gap in gender pay, along with the average woman spending 15 percent of her working years outside the workforce caring for children/elderly parents, compared to a mere 1.6 percent for most men. And, let’s be honest: According to a study done by AOL, women simply tend to spend more than men on everything from health insurance to everyday products for skin and hair care. Women are also more likely to spend more on their children – something that is culturally reinforced according to the Wall Street Journal.

To complicate the issue further, most women tend to feel uncomfortable talking about money. Eighty percent admit they won’t discuss finances even with those they are closest to, while only around 47 percent would discuss money with a financial professional, according to the Fidelity Money Fit Women survey. Many women admit to being more comfortable discussing a health issue or their personal lives than money.

All of these factors can negatively influence a woman’s ability to pay off her debt. Below are a few thoughts to consider:

Analyze your spending habits. Ultimately, you are responsible for your budget and how much you spend. Sure, we all splurge once in a while, but if it’s a regular habit and you find yourself frequently charging items you can’t really afford, it may be time to reassess your lifestyle and priorities. Take a moment and think before your pull out your credit card – do I really need this (sweater, pair of shoes, new purse)?

Don’t leave it to your significant other. Don’t assume that your partner will “take care” of your debt, or the family’s debt. Men may be more comfortable talking about money, but statistics from the National Center for Women and Retirement show that 80-90 percent of women will be in control of their own finances at some point in their lives – due mainly to divorce or widowhood (women tend to outlive men by an average of seven years). There are also more single, self-supporting women in the US now, than at any time since the national census began.

Figure out what you owe. Make a list of all your debt and how much interest you pay. The interest rate will help you determine what to focus on paying off first, while still paying the minimum owed on other bills. For example, if your highest interest rate is on a credit card, consider transferring the balance to a zero-interest credit card for six months to consolidate your debt – and stop spending. This buys you time to pay off debt without incurring additional interest. Once it’s paid off, start paying down the next highest interest rate bill, and so on.

Negotiate your rates. Creditors want you to pay back everything you owe. If you declare bankruptcy, they’ll only get pennies on the dollar – if anything. If you’re struggling to make payments, call your creditors and negotiate an alternative repayment plan with (hopefully) reduced interest rates and fees. Yes, they are willing to “negotiate” to a certain degree.

Reach out to your local credit union or bank. Your local credit union or bank can also help in a variety of ways, including working with you to refinance a mortgage to a lower rate (meaning smaller monthly payments) or consolidating high-interest debts into one manageable loan. In Silicon Valley and the San Francisco Bay Area, Tech CU can put you in touch with their Certified Credit Union Financial Counselors (CCUFC), who are qualified to work with people going through a broad range of financial situations.

Consider credit counseling/debt management services. If figuring all of this out on your own seems overwhelming, consider professional help. The National Foundation for Credit Counseling is a reputable nonprofit organization that can put you in touch with a certified consumer credit counselor to help you come up with a reasonable plan.