How women can tackle their stress about debt | Ally (2024)

DEBT

NICOLE COPE & JACK HOWARD ·Feb. 23, 2024 · 4 min read

What we'll cover

​​The busy lives we lead today have us juggling careers, families and friendships — oh, and our finances, too. A quarter of millennial men say they’re worried about what they owe, but that number goes up to 35% for millennial women when asked if their debt causes them significant stress.

We asked our money experts Jack Howard, head of money wellness at Ally Financial, and Nicole Cope, senior director of Ally Invest Advisors, to share ways women can better manage their debt worries.

Why are women more stressed about debt?

Jack Howard: Historically, women have been left out of money conversations and kept financially dependent on their partner or family for financial support and guidance. Now, more women are taking ownership of their financial journeys, from building credit to paying off debt to investing for retirement and beyond — but they likely have less income to work with, as women are paid, on average, 83.7% as much as men (even less if they're women of color or with disabilities).

Nicole Cope:In addition, more women are attending college and pursuing advanced degrees, which tends to create student loan debt . And if you think about how women engage with the overall household finances, they are often the money managers of the entire family’s day-to-day expenses.

How can women manage their debt stress?

Cope: Talk to somebody. Talk to a trusted advocate or a financial advisor — have somebody that you can share your financial situation with. From there, you can start to focus on how to remove some of the emotions that are causing stress.

Women should also consider whether their debt is in service to something else, like education or growing a family. Keeping a long-term mindset and remembering your goals can be extremely powerful in managing negative emotions around debt.

The two most common reasons for not investing are a lack of money and a lack of knowledge. How can women move past these barriers?

Howard: The banking and investing industries are known for using a lot of jargon that can be exclusionary, specifically for underserved communities and women.At Ally, we work to be conversational and welcoming with the goal of making all aspects of managing finances easier to navigate.

But you have to take the first step. I am an advocate for financial education and lifelong learning. So many resources help breakdown the basics — books, such as Financial Feminist by Tori Dunlap or I Can Teach You to Be Rich by Ramit Sethi, and podcasts, such as Earn Your Leisure, are great starting points. And once you have the knowledge, it's important to implement what you have learned.

Cope: With Ally Invest, you can open a brokerage account or robo account with very limited money to start participating in the market. If you can afford a nominal amount each month, a robo portfolio will automate the rest for you. Women can also research different ETFs to find a passion point and get over that potential hurdle of “I don't know enough.”

Can women with debt still benefit from a financial advisor?

Cope: Absolutely. You wouldn’t take a cross-country road trip without having a plan in place. The same is true to approaching debt. Advisors can walk you through different approaches to debt management and creative budgeting . We need to change the perception of what financial advice really is — less about what investments to choose, and more about the overall plan and how to support it.

What do you do to manage financial stress?

Howard: In my own life, I find that opening mail (such as bills) creates stress. But I combat this by automating everything . I also ask for guidance and support from my friends and financial advisor, which lessens the stress and helps me move forward toward productive financial habits.

We each have our own individual money experiences and emotions. Whenever you have an immediate emotional reaction to a financial decision, I suggest you pause and consider what you are feeling at that moment and how you might feel later if you proceed or alter the decision.

If you could have a group of women stressed about their debt together in a room, what advice would you give them?

Howard:I would encourage them to take the CFPB Financial Well-Being Assessment , which helps you explore how well your current money situation is providing you with financial security and freedom of choice. After completing it, make a list of two or three action items you can implement today to improve your well-being score. For instance, you might create a journal where you record observations (especially your thoughts and feelings) about your financial situation each day.

Cope:There’s a quote by Carl Jung — “Until you make the unconscious conscious, it will direct your life and you will call it fate.” To me, that's a behavioral mantra: “What is going on in my subconscious that is causing me to repeat these same behaviors?”

I’d also tell them to look at the community around them. Have conversations , share your fears and your wins. The more we can include community, the better off we will all be.