We’ve long known that finances are a big source of stress, especially for women. Everyone’s heard the term “She-cession.” We know that gender bias runs rampant in the business world. And we know that the gender wealth gap is huge. But we didn’t have a means to measure where women’s overall financial health stands right now, or the ways they are navigating it.

So we built one.

Introducing the Ellevest Women’s Financial Health Index

While there’s a lot of information about certain things that impact women’s financial health — the pay gap, inflation, employment rates, etc — none of those individual data points tell the whole story. But if we don’t track our progress (or regression) over time, we’re blind to what might happen next. Plus, it’s hard to improve what you can’t measure — or advocate for change around something you can’t quantify.

So, as the financial company built specifically for women — one that helps tens of thousands of real women understand and manage their money every day, one that literally exists to get more money in the hands of women — we knew it was up to us. And so we developed the first and only holistic measure of women’s financial health.

Without getting too nerdy on you (although I did here, for those of you who love data as much as I do), here’s how it works: The Ellevest Women’s Financial Health Index takes 12 major indicators and combines them into, well, an index — a single score that quantifies and tracks women’s financial health. It measures how much it feels like the financial landscape is working for us or against us, and how we’re navigating it.

Those indicators are:

• Women’s employment

• The gender student debt gap

• Consumer confidence

• Inflation

• The pay gap

• Access to paid family leave

• Reproductive autonomy

• The number of women CEOs in Fortune 500 companies

• The number of women in Congress

• Venture capital raised by women

• Whether women are saving and investing regularly, according to our internal data

• Whether women are investing for impact, again according to our internal data

The result is a number between 1 and 10, with 1 being the worst things have been for women’s financial health in the time period measured (in this case, from May 2018 to today), and 10 being the best.

So … how are women doing right now?

Well, it probably won’t surprise you to hear that things are tough right now. But here’s the part that might: As measured by the index, things are even tougher than they were in the middle of the COVID-19 shutdown. While its average for this time period was 6.8, the Ellevest Women’s Financial Health Index currently sits at a score of 1. In other words, our measure of women’s financial health is worse right now than it has been at any other time in the last five years.

The reasons why probably also won’t come as a surprise. Inflation is at an all-time high for the time period we studied, and consumer confidence is at an all-time low. Though the Great Resignation may have helped women’s employment rates rebound, wages just aren’t keeping up with inflation. And then, it almost goes without saying, there’s the ongoing attack against abortion and access to reproductive health care, which has huge economic implications.

So that’s the bad news. And we know it’s easy to feel overwhelmed by it — we were at first, as well. It’s a sobering reflection of what so many of us are experiencing in our lives, in our relationships, and in our workplaces and communities. But this number arms us with a new way to measure, talk about, and advocate for women’s financial health.

What’s next?

Next, we shout this wake-up call to anyone who will listen, focus on the next steps it tells us to take, and keep working to drive systemic change.

The silver lining is that some factors are trending up (even if it’s not always as quickly as we’d like): More women are serving in Congress and in the C-suite at Fortune 500 companies. And in 2021, women founders received more venture capital funding than ever before (even if it is still significantly less than what men founders got). And more women than ever before are choosing to invest their money for impact. Paired with our findings from the Ellevest Financial Wellness Survey 2022, which showed that more and more women are actively prioritizing their financial wellness, things are far from hopeless.

Plus, advocacy and change in one area can lift others: For example, greater numbers of women elected to Congress can (hopefully) help protect reproductive autonomy. More women leaders at Fortune 500 companies can lead to paid family leave for more workers. More venture capital to women founders can mean more companies solving real-world problems that women face.

We’ll be calculating the Ellevest Women’s Financial Health Index on a monthly basis going forward. We’ll continue to track the results, identify opportunities, share updates, and push for change.

In the meantime, don’t give in to these forces — there are always steps we can take to improve our own, individual financial health. Work to build a solid financial foundation, construct and follow a financial plan, and improve your relationship with money. (We created a set of downloadable worksheets to get you started.) Demand more. And invest your money in the companies and industries that align with your values and work to make the world a better place.

We’ll be here every step of the way.

Full results and methodology for the Ellevest Women’s Financial Health Index can be found here.

Disclosures