«But as in most recent days
The woman changed her thrifty ways,
And, like every careless debtor known,
Desires far more than coins she owns,
Thus must the man endure and fret,
Wherever he turns, he finds more debt.»

The wasteful, consumption-obsessed woman who is to blame for the debt. Even Johann Wolfgang von Goethe in 1832 attributed an extravagant consumer behavior to women. It has little to do with reality. And even in 2025, these stereotypes persist. That’s why ellexx has taken a closer look at female spending patterns and women’s debt behavior.

In Switzerland, one in eight people lives in a household with debt—that’s 11.6 percent of the population. Among the 500,000 indebted individuals, the significant majority were men. But women also go into debt. So where do the differences lie? Do women accumulate debt differently or «worse»? In other words: Who pays higher interest rates and gets worse repayment conditions?

Pascal Pfister
Our counseling experience shows that women set better priorities in their budgets.

Women go into debt out of necessity, men for cars

A study by American University titled «Debt Matters» reveals that women are more likely to take out loans and fall into debt to cover income gaps. In contrast, men tend to take on debt for luxury items like cars, home theater systems, or watches.

In Switzerland, counseling centers have found that women more often use loans to cover everyday expenses. Pascal Pfister, managing director of the Swiss Debt Counseling Association, confirms: «Our counseling experience shows that women set better priorities in their budgets. They are more frugal, more disciplined, but also often very hard on themselves. They focus specifically on securing their basic needs.» This, Pfister explains, is because women generally have less money available: «You could conclude that women often manage better because they have to. They often have smaller budgets and have less financial security, especially regarding retirement.» This more cautious debt behavior is thus likely not about disposition, but about structural and systemic factors.

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The Debt Trap: Children

A UK study found that mothers spend, on average, 655 pounds more annually on childcare than fathers. Furthermore, women spend more on household costs like energy and groceries. These high fixed costs can be the start of a growing mountain of debt.

Pascal Pfister
Women have to manage better because they usually have smaller budgets.

Barbara Mantz, a debt counselor at Caritas Zurich, stresses that single mothers are especially vulnerable to falling into the debt trap due to their life situations: «Indebted mothers have often taken less paid work before the divorce than men.» They thus have less income, fewer opportunities to build assets, and weaker pension provisions. In a study, 60 percent of mothers and 20 percent of child-free women said their personal income was not sufficient to maintain their current standard of living. Many are financially dependent on their partners.

After separation, 80 percent of mothers live alone with their children. Of them, 16 percent depend on social assistance. According to estimates by the Swiss Debt Counseling Association, this affects around 9,000 mothers in Switzerland per year. Fathers, by contrast, are no more likely to fall into financial distress after a breakup than before. However, Mantz notes that men may also experience financial hardship due to alimony obligations after divorce.

Barbara Mantz
Indebted mothers have often taken less paid work before the divorce than men.

Another issue Mantz observes in single parents is a lack of time: «Single parents have very little time, are often exhausted, and lack the energy to manage or plan their finances.» Planning is essential, as Mantz elaborates: «A crucial step to overcoming debt is financial planning. You need an overview of assets, income, and expenses. Without time for this, it’s difficult to get out of debt.»

Financial Abuse: Violence Through Money

Divorce and single parenthood aren’t the only triggers of women’s debt. The City of Zurich’s debt prevention office also documents cases of so-called financial abuse in marriage. Through «Money Chat», people reach out to discuss equitable money distribution in their families. Among them are individuals who manage the household and child care but have almost no money of their own. Their partners allocate them minimal household funds. This financial dependency is burdensome and undermines financial health.

Financial abuse is often the first stage of domestic violence. The abuse begins subtly: the partner suggests a joint account and gradually takes control of all finances — framing it as «love». Statements like, «You don’t need to worry, I’ll take care of it» lead to complete financial dependency, especially harmful in the case of a separation.

Women Face Disadvantages in Access to Credit

Even beyond relationships and separation, women face structural disadvantages when it comes to money. For example, they face worse conditions when applying for loans. According to a study by PwC and Totally Money, women have a credit score that is, on average, 10 points lower than men — throughout their entire lives. This means women are offered fewer loans. They receive fewer binding credit card offers and are eligible for 22 percent fewer credit cards than men. On top of that, women pay, on average, 0.8 percentage points more in annual credit card interest.

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What causes this? One potential explanation is the gender pay gap. In Switzerland, women still earn 18 percent less than men. They perform more unpaid care work and work part-time more frequently. Globally, women hold the majority of low-wage jobs. This lower wealth is a main driver of their poorer credit scores.

Barbara Mantz
Many people are afraid to open their mail because they can’t keep up with the bills.

Getting Out of Debt

The biggest debt traps for women have been presented. However, can they escape them or avoid them altogether? We spoke with experts who offered the following tips to prevent and escape debt:

  • Face the problem: According to Mantz, the first step is to confront the issue: «Many people are afraid to open their mail because they can’t keep up with their bills.» Don’t look away. Acknowledge the problem!
  • Seek help: The next step is to get professional help, ideally from a debt counseling center, such as the Swiss Debt Counseling Association. Many find it hard to ask for help, so it’s important to stress: Don’t be ashamed of your debt! With rising living costs, many in Switzerland are struggling. In 2023, debt enforcement proceedings rose by 10 percent.
  • Make smart financial decisions: Experts recommend strengthening personal agency by building financial literacy. This helps in making informed decisions.
  • Budget planning: Mantz emphasizes: «Planning is key to getting out of debt.» You need a clear picture of your income, expenses, and assets to identify potential debt traps early.
  • Break financial patterns: Once you have an overview, work to disrupt harmful debt patterns. A common trap, according to Mantz, is the credit card. A good first step: avoid using it. Another key point is adjusting your lifestyle to match your financial reality. Counseling centers can help with this process.

A Matter of Politics

Once a person is in debt, it’s difficult to get out, even with professional help and discipline. That’s partly due to Switzerland’s legal framework. Unlike most OECD countries, Switzerland doesn't have a personal insolvency procedure with debt discharge.

Such a procedure would allow indebted individuals to live at subsistence level for a set period, during which they make regular payments toward their debt. Afterwards, any remaining debt is written off. A legal reform in Switzerland is underway, aiming to give indebted individuals a second chance at living debt-free: The Federal Council launched a consultation process for a restructuring procedure on June 3, 2022. The law is currently being revised.

This article was originally published in German on 25.06.2024.