Women & Wealth: From Student Debt to Financial Success
This is part 1 of our 8-part Women & Wealth series in celebration of Women’s History Month.
We interviewed several women whose experiences span different generations, backgrounds, ethnicities, socio-economic classes, and careers, and asked them to tell their stories of financial literacy.
Our goal? To empower all women to become confident in their finances. We believe that homeownership is the foundation of wealth and that home lenders—who hold the key to this achievement—play a crucial role in helping women attain financial independence.
These women’s stories will not only educate, but inspire. Read on to learn how Gina Roffo found her way to financial independence.
Student debt is an epidemic in the United States—and it is hitting women the hardest. As of 2021, Americans owe an astounding $1.71 trillion in student loans. This crisis disproportionately impacts women, who are responsible for 58% of that debt ($992 billion).
There is no one single reason for this phenomenon. The reality is that many complex factors have made it so that women face more obstacles to financial independence than men. One of the most compelling is the gender pay gap. Women make less than men, earning only $0.81 for every dollar a man makes.
As a result, women simply have less money available to pay back their debt than men. Add on the fact that women are more likely to pursue higher education, and it becomes clearer that women frequently lack the time and money needed to repay debt.
It’s also important to note that women have historically had a harder time remaining employed during economic downturns. Just last year, for instance, women lost more than 100% of the 140,000 jobs lost in the month of December. How is this possible? Women lost 156,000 jobs, while men gained 16,000, producing a net loss of 140,000 jobs.
The bottom line is that women face unique hurdles when it comes to debt. This is why financial literacy is so important to women, in particular. Financial education can help those in debt get out of it—and keep those without debt from accumulating it in the first place.
We interviewed Gina Roffo, a 32-year-old woman who has had an intimate relationship with student debt. Her story takes us from her childhood, where she grew up with an acute understanding of the wealth disparities in her neighborhood, to eventually overcoming debt and becoming a financially independent woman. We’ll learn about Gina’s early experiences with money, explore how she came to find herself in debt, and see how she ultimately repaid her debt and started moving forward toward building wealth.
Gina Roffo: “I couldn’t do anything with my money to make it work harder than just paying off the student debt.”
Gina is a Millennial who spent the first two-and-a-half decades of her life in Massachusetts. The oldest of four, she had a unique upbringing.
Because her father was a builder, Gina’s family was able to acquire special financing to construct a house in an upper middle class neighborhood. As Gina recalls, however, the challenge was that her family was, economically, “slightly below everyone else in this neighborhood.”
While her parents worked hard and eventually achieved upward mobility, Gina admits that there were difficulties in the beginning: “It was always very tentative how we could engage with these neighbors,” she admits. “‘Can we afford that?’ We were kind of on the fringe of being in the community that we were in.”
It was these circumstances, Gina says, that set the stage for her future financial mindset: “It made me very passionate about being financially independent and being able to make smart decisions with my own money, careful about who I exposed my financial situation to, or how my ability to spend or not spend money would come across.”
Early experiences with money
Even though Gina didn’t receive an allowance while growing up, her parents made a point of teaching her and her siblings to understand financial limitations and responsibilities.
One of the best ways her mom did this, Gina recalls, was by getting the kids involved in grocery shopping. Gina’s mother would bring the kids to the store with a maximum spend (e.g., $100 for the whole trip) and tell them to take over the shopping.
“Even though I was probably, like, seven or eight years old,” Gina recounts, “my brothers and I would figure out what made sense. We wanted this cereal, but we can't have this cereal unless we don't get this other thing, you know?”
While this involved some math skills, Gina admits, it also made her and her siblings conscious of the fact that they were “operating within a very specific budget” and had to learn how to make decisions within those boundaries. This created a learning experience that was interactive, freeing, and, ultimately, fun—almost “gamifying” the concept of financial literacy.
Gina says that her parents didn’t speak directly to her about finances and how to manage them. They did, however, teach through example—they prioritized their children's’ educations, even when times were tough. “Even if they didn’t have a lot of money,” Gina recalls, “they focused on spending their money to send us to better schools than the ones that were in our town. Even though we didn’t necessarily have a ton of college savings, it was a focus and worth the money.”
Many families believe that education is one of the best investments they can make in their children’s futures. It can be hard, however, to determine whether the cost of a university education is justified by the opportunities it may bring down the road. While Gina undoubtedly values her education (and the sacrifices her parents made to give her a better life), she found it difficult to tackle the student debt she took on to fund her education.
Struggling with student debt
In her twenties, Gina found herself living with the weight of student debt. Like many others in this position, she had some difficult decisions to make. This uncertain balancing act brought many questions: Gina wondered “how to prioritize managing debt while also trying to grow some personal wealth at the same time, and how to do those calculations. If I’m paying this much interest on my debt, then I need to be making this much more interest on something else, or else I could just pay off the debt.”
This challenge was further compounded by the high interest rates on her student debt. Predatory lending companies are a real threat, hitting borrowers with “surprise fees, damaged credit, lost loan records and repayment benefits resulting from loan servicer transfers.” This is, of course, in addition to the absurd interest rates, often above 100% APR (when 36% and below are considered “affordable”).
“I had very high interest rates on the bulk of my student debt from some of these predatory lending companies,” Gina admits. “I couldn’t do anything with my money to make it work harder than just paying off the debt. So, I knew that had to be front and center to what I was trying to get done.”
The weight of this burden can be damaging, both professionally and psychologically. In fact, some studies show that 25% of people with depression also have problems with debt, suggesting a link between debt and mental well-being.
“There’s also a very personal component to it,” Gina admits. She, like many others, feels that she graduated with a disadvantage: the feeling that “you’re starting out your life a little bit behind, financially behind. Even if I had low-interest student debt,” she says, “that just feels like such a burden that you just want to pay it off.”
Sexism in the workplace
We know the damaging effects of the gender pay gap and its intrinsic connection to debt. However, numbers don’t always tell the whole story. As Gina’s story shows, women face real, daily barriers to success (and feeling comfortable) at work.
In her first job, Gina says, “there was absolutely bias—not even subtly.”
She was the only woman on a team of men, and they didn’t take her seriously as a part of the team. “They were giving me all this really BS work,” Gina recalls, “and not working with me or teaching me anything, knowing I was brand new.”
Gina went to the manager, trying to find a solution. She wanted to add value and build trust with the team to show them that she could contribute. She asked for advice and requested that her boss help encourage her coworkers to take her seriously.
His response? “‘It’s not your fault. And I don’t feel this way, but all the other guys on the team just assume you’re going to get pregnant and leave all the work they’ve given you back to them. So there’s not a lot I can do about that.’”
This blatant disregard for her role and value at work is not unique to Gina. Simply because she was a woman, her coworkers attempted to stifle her potential. This is one of the prevailing reasons why so many women are passed on for promotions and high-visibility projects. As a result, they don't get salary increases, bonuses, and stock options, thus contributing to the gender pay gap.
Gina, like so many other women, had to work that much harder to prove herself.
Learning finances on your feet
Gina fought her way through debt and sexism—but it took time. Even with financial independence at the top of her priority list, she was unable to actually feel that she had a good grasp on her finances until she was almost 30.
Like many women, Gina shares that she learned about finances “mostly through trial and error.” She found herself learning from the mistakes she made: “There’s an impact when I don’t pay off my full credit card every month. There’s an impact if I ignore a bill that comes in the mail. There’s an impact if I, on a whim, buy something I don’t need. There’s an impact to actually investing my money or leveraging my 401k match to see what those accounts look like today versus if I hadn’t taken advantage of that.”
In short, Gina learned about things the hard way. But she learned, grew, and prospered. Now in her 30s, Gina and her husband, Pat, work together to build wealth. “Basically, we share everything. We have combined finances for our household.”
Originally, it was difficult to share everything—Pat didn’t have student debt. There was a level of vulnerability Gina had to wrestle with. “Over time, I think we built the right rapport to where we can talk about it, but it was not like that right away.”
Onwards, to wealth?
Despite her initial challenges with debt, Gina has managed to achieve multiple financial milestones. She has paid off her debt and bought a house.
While she feels like those are great first steps, there are still a lot of question marks for the future. When it comes to investment and wealth building, she is still not sure where to turn. “What’s been really weird and confusing is: where do we go for advice, unbiased advice, on what to do next? We’ve taken the regular steps of putting some money in retirement, investing in a property, and putting some money in some stable bonds. But how do you take the next leap forward in terms of wealth building? And who can help us figure that out? Because if we go to a wealth manager, they get referrals and money for putting your money in certain places. But who can give us objective advice?”
Gina’s done well to overcome the challenges of debt—especially given the unique challenges she’s faced as a woman. But building wealth is not easy or straightforward—after every challenge comes another. Gina’s steadfast spirit, inquisitive nature, and discipline have served her well, but the road may have been easier for her with a stronger sense of financial literacy from a younger age.
We can and should do better—as people, as a society, and as institutions—to educate young women in financial literacy.
More on Women & Wealth: