Subscribe to this BlogWomen, men and money
When it comes to managing money, women worry a lot more than men do—and women are more likely to ask for help with their money problems.
That's the gender gap described in a recent report by Financial Finesse, a firm that operates a financial planning helpline as an employee benefit for large companies.
Among the findings: only 53% women say they have a handle on their cash flow and spend less than they make each month. By contrast, 71% of men made that claim. Only 36% of women say they regularly pay off their credit card balances in full, compared with 61% of men.
During that same period, Financial Finesse received more than twice as many helpline calls from women as from men—68% vs. 32%. More than 40% of the calls from women concerned debt problems, according to the study, compared with 36% for men. And nearly 30% of the debt-related calls involved urgent financial issues, such as foreclosure and bankruptcy.
The same gender gap can be seen when it comes to investing. Four out of 10 women say they have a general knowledge of of stocks, bonds and mutual funds, vs. 73% of men. And only 24% of women feel confident that their investments are appropriately allocated, compared with 40% of men.
So are women simply less capable than men when it comes to handling money matters? Not necessarily. Women were just as likely as men to agree that they contribute to their workplace retirement plan (86% vs. 85%). And only one third, about the same as for men, said they were uncomfortable with the amount of (non-mortgage) debt they held.
Perhaps the real issue is confidence. A 2006 survey by Harris Poll for Charles Schwab found that 48% of women, twice as big a percentage as men, agreed that "investing is scary for me."
Yet despite this lack of assurance, women often do better job of investing than men. As a 1999 study (pdf)Â by finance professors Brad Barber and Terrance Odean found, women's risk-adjusted returns have beaten men's by one percentage point a year. The key reason: women trade less frequently and hold less risky portfolios, Men, by contrast, tend to be overconfident, which hurts their performance.
And despite their doubts, women, more often than not, are the ones managing the money in their households. Some 60% of women say they are responsible for budgeting, bill paying and day-to-day spending, according to a 2006 survey by Money, although more men claim responsibility for investing and retirement planning decisions.
But with experience, and a higher income, women's financial confidence and responsibility grow. Among women with portfolios of $100,000 or more, some 63% say they are the CFO of their household and make the majority of financial decisions, according to research by Citibank's Women & Co. program. And some seven out of 10 agree that they are knowledgeable about finances and investing
That said, women do need to be concerned about their finances in ways that men don't. That's because they still face a gender income gap, with women earning less than men on average. Women also face the challenge of financing a longer retirement on that lower income, since they tend to outlive men. Poverty rates among older women are twice as high as for older men, according to AARP.
So the lessons for women are clear: take charge of your money, and unlike men, don't be afraid to ask for directions when you need them.
This is not perpetuatlization of stereotypes this a report of FACTUAL data collected from various sources all over the country.
Women may fret more about money but there are some things in "woman culture' that makes saving harder than it needs to be. Most of the women I'm thinking about do not spend lavishly on themselves, rather they live in a world where everybody deserves a present. Office mate moves to a new home: home warming present. Sister's best friend has a baby: shower present. Not to mention presents for the kid's teachers and coaches. I could go on but I am hoping you see my point. Once in a blue moon I will see something that is a terrific fit for one of my guy friends and I'll pick it up but I certainly don't feel obligated.
This is such a ridiculous article and continues to perpetuate stereotypes. I take care of our family's finances and my husband does not have a clue on a day to day basis of what goes on and it does not seem to interest him. Because of my attention to detail, we have excellent credit and have continually paid off our debt. It is not a gender thing!!!
I make the investment decisions after discussing them with my wife. She applies the brakes to keep us moderately conservative (thank goodness – our loss last year was less than 15% of our portfolio). I [try to] apply the brakes to spending. I work and she shops, I pay the bills and we have lively discussions. As the Arsenal of Democracy for our extended family, she makes sure that no one does without. I explain that no matter how good the reason, when you spend the money it's gone forever. She explains that I won't live forever and can't take it with me. I respond that I want it to outlast us and still have some there to pass on. She responds it's better to "do the giving while you're living". We dig our heels in, argue, negotiate, and find some compromise we can both live withn and still keep a sense of humor. I'll make sure we make it through retirement, she'll make sure we share some of our good fortune with kids and grandkids. Mars and Venus meet in the middle and it's called Kalamazoo, MI.
We have a strange setup in our household. My husband is the nerd, doesn't believe in spending, very stingy with money. I am the free spirit and before marriage used to spend every penny I made and more. Yet, unbelievably I am the one who does the budget, pays the bills and handles all the investments and grocery shopping. He doesn't even know how to log into the accounts online. I am just amazed that he so fully trusts me knowing my past. I never cheated with money, because I respect him. I wish he would be more interested in our financial situation. Every couple I know, it's the women who is doing all the finances. The guys could care less.
Well, when I married my wife she was years behind in student loan payments and it took me more than two years to fix that and outstanding debt from other creditors. I worry so much more about money than she does it is not funny. As for the woman shopping for the whole family, give me a break. I know what we spend it on as I watch like a hawk about what gets spent where. Stop being a victim.
Using credit is a leveraged risk that you must balance and not take for granted.
Are men or women better at managing money? I say it is all in the upbringing. My parents taught me a great deal about money as did my grandparents. My wife was shielded from that. Therefore I theorize that it is all environmental. I am raising two daughters and believe me they will know how the system works and how to take the appropriate risks and balance cash flows.
Regardless of the gender difference, every American should learn to manage money and invest wisely. I'm afraid it's too late to talk about this topic, the whole country is moving toward bankruptcy. Then we will talk about sharing the pain: which means more tax and high inflation. The number one key is to spend less than you earn, save as much as you can, but most people I can tell waste money everywhere, 2 dollars here, 5 dollars there… In general I'm willing to share the pain, but if you create the problem by wasting money, I don't want to share your pain.
Education and training in finances makes financial decisions less scary. My husband was more than $40k in debt when we met, even though it was not on a credit card. I established a budget and a plan and we were out of debt in less than 2 years. If you read the article, women tend to invest more wisely than men and they have a lot to offer when it comes to finances. Stereotyping women just perpetuates gender gaps and creates hostility.
Has anyone ever thought about the way the average american household runs? The woman buys the groceries, clothes for the WHOLE FAMILY, takes care of the kids expenses for school and extracurricular activities, etc. often while the man is sitting on the couch relaxing after work not wanting to deal with the little things. Women have the hardest job in the world balancing work, household, kids and husbands. Please notice I didn't mention having time for themselves because that usually gets put on the back burner. My point is that all this debt women supposedly run up is generally not just for them but for the whole family. Any man that is too lazy to be realistic about grocery bills, clothing costs, football dues for little Tommy etc. deserves to find out that they are 10k in cc debt.
They worry more about money because they are the ones getting into credit card debt. Their desire to buy clothes, shoes and home decor items are their downfall. The article points out men pay off the credit debt more than women do. Women are the ones calling credit card debt counseling organizations for help. Article is misleading.
gender gap huh…. there was just an article in the WSJ a week ago about women having 60% of all wealth in the USA. So in my opinion they have it better financially then men, not worse.
I have been married for over 30 years. After 15 years I took over the finances from my wife who often paid the bills late ruining our credit. To this day, for her, anything financial takes a back seat to the latest issues with the children. Other than that she has a great investing sense and is really frugal with resources. She does worry about money more than me but tends to fret over small expenses rather than looking at major ones that impact everything.
I think this article is important because it points out that women have different financial planning needs than men. Women worry about money more, and they tend to have more debt than men. We live longer than men do, make less money over our lifetime, and tend to have more charitable intent, so therefore our needs are different. It is time for financial planning to take a different shape to address what's most important to us.
Really, this article panders to create a women against men argument. We need to get away from this attitude to create a better society.
Basically, women have not learned that credit cards are not really money, and they cannot get away with shopping till they drop, using credit cards.
Another way to look at things is that as a team men and women are fully equipped to succeed. In many ways that goes into other ares of life as well as the inherent differences between men and women are actually of great benefit.
What is the point? Did the media really need another issue to pander to women? Women are worse with money than men; the problem is men need to reprogram themselves and get out from under the control of women. Women use the family money to control men and that is unacceptable. Of course, the feminists tell a different version of the same story; one that makes them look superior and in charge.
Maybe the men feel so confident because they ASSUME that the women who are handling the money are paying off the credit cards every month! And since the women are managing the money, they are the ones making calls and asking for help/advice.
I don't think it's any more complicated than 'we ask for directions when we are lost' and most men (even sensitive ones) can not.
I don't think it's a reflection of money management; just help management.