How (and why) we created the Ellevest Women’s Financial Health Index

How are you?

It is something we ask ourselves often, especially since the pandemic began. There is a lot of content in that little question: we are asking about someone’s mental, physical and emotional health. But what underlies, we would say, is your financial health.

We can feel his skepticism seeping through the screen. But think about it: you’re asking if their job is going well, if they’re feeling stressed about gas prices, if they’re feeling hopeful or worried about their (financial) future, etc.

We’ve long known that finances are a huge source of stress, especially for women. Everyone has heard the termshe-assignment.” We know that gender bias is rampant in the business world. And we know that the gender wealth gap is huge. But we didn’t have a means of measuring where women’s overall financial health is right now, or the ways they’re navigating it.

So we built one.

Introducing the Ellevest Women’s Financial Health Index

While there is a lot of information about certain things that affect 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 are blind to what might happen next. Also, it’s hard to improve what you can’t measure, or advocate for change in something you can’t quantify.

As well 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 put more money in the hands of women, we knew it was up to us. And so we developed the first and only comprehensive measure of women’s financial health.

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without getting also nerdy with you (although i did it herefor those of you who love data as much as I do), here’s how it works: Ellevest’s Women’s Financial Health Index takes 12 leading indicators and combines them into, well, one 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 or against us, and how we’re navigating it.

Those indicators are:

  • women’s employment

  • The Student Debt Gender Gap

  • consumer confidence

  • Inflation

  • The pay gap

  • Access to paid family leave

  • reproductive autonomy

  • The number of female CEOs at Fortune 500 companies

  • The number of women in Congress

  • Venture capital raised by women

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

  • Whether women are investing to make an impact, again based on our internal data

The result is a number between 1 and 10, with 1 being the worst for the financial health of women in the period of time 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 learn 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 amid the COVID-19 shutdown. While his average for this time period was 6.8, Ellevest’s Women’s Financial Health Index currently has a score of 1. In other words, our measure of women’s financial health is worse now than at any time in the last five years.

A black and white graph showing the Ellevest Women's Financial Health Index score from June 2018.

The reasons why are probably not a surprise either. Inflation is at an all time high for the time period we study, and consumer confidence is at an all time low. While the Great Renunciation may have helped women’s employment rates rebound, wages simply aren’t keeping up with inflation. And then, almost needless to say, there is the ongoing attack on abortion and access to reproductive health care, which has enormous economic implications.

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

Whats Next?

We then 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 rising (even if not always as fast as we’d like): More women are serving in Congress and in the C-suite at Fortune 500 companies. And in 2021, female founders received more venture capital funding than ever before (even if it’s still significantly less than what the founding men got). And more women than ever are choosing to invest their money to make an impact. Coupled with our findings from the 2022 Ellevest Financial Well-Being Survey, which showed that more and more women are actively prioritizing their financial well-being, things are far from hopeless.

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

We will calculate the Ellevest Women’s Financial Health Index on a monthly basis in the future. We will continue to track results, identify opportunities, share updates and drive change.

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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, build and follow a financial plan, and improve your relationship with money. (We’ve created a set of downloadable worksheets to get you started.) Demand more. And invest your money in companies and industries that align with your values ​​and work to make the world a better place.

We will be here every step of the way.

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