The differences between the sexes can be a pretty touchy subject. Whenever you talk in general terms about men and women, you must pick your words carefully so you don’t sound like you’re promoting sexist stereotypes. Sometimes it seems safer to ignore the whole idea and stick to talking about “people,” as if men and women were entirely the same.
But the reality is that there are some areas where that’s clearly not true – and money is one of them. From the things they spend money on to the way they invest, men and women take different approaches to dealing with money. Men are more likely to make certain types of financial mistakes than women, and vice versa.
Being aware of these differences can help you better understand your own money habits. It can open your eyes to strengths and weaknesses you share with others of your gender, and help you find ways to handle your money that work with your instincts, not against them.
Men and women differ not just in how they use money, but also in how they think about money. Their top financial goals, as well as their greatest financial fears, are similar, but they put different amounts of stress on each one.
Men and women have fairly similar financial goals overall, but there are subtle differences in which ones they focus on most. For instance, a 2018 survey by The Motley Fool found that men were most likely to name saving for a vacation as their top financial goal, followed closely by paying off credit card debt. For women, these were still the top two goals, but in the opposite order. Women were also more likely to name improving their credit and paying off student loans as goals, while men were more likely to mention buying a home, buying a car, or finding a new job.
Although men and women are largely in agreement over their goals, they differ considerably in how much money they earmark for those goals. The 2017 Mylo study found that men as a whole aimed to set aside nearly twice as much money for their chosen goals ($47,810) as women did ($24,843).
This pattern was similar for other goals. Men aimed to raise 67% more for a gift or major purchase, 56% more to start a business, and 42% more for a house. The only goals for which women set slightly higher targets were health, weddings, and education.
Why do women set more modest financial goals than men? For starters, women earn less, so they can’t realistically expect to raise as much money. It could also have something to do with confidence. Men are more confident in their investing abilities, so they’re more willing to set ambitious – though possibly unrealistic – targets.
Men’s and women’s fears about money, like their financial goals, are slightly different. Both sexes worry about the same things in general, but they differ in which things worry them the most.
A 2017 survey by GoBankingRates asked 2,500 Americans to name their biggest fear about money. The top answer for men was “Never being able to retire,” with 23% of the vote. However, this was only the second most popular answer for women, whose top concern was, “Always living paycheck to paycheck,” named by 25% of women and only 17% of men. “Living in debt forever” was the third choice, with 17% of the male vote and 18% of the female vote.
Fidelity’s “Single Women and Money” study found similar results. In that study, the top three money concerns for both single women and single men were living comfortably in retirement, paying down debt while still saving for the future, and being able to pay bills if faced with a job loss. However, all three of these were greater fears for women than they were for men. Roughly one-third of all single women named them as fears, as opposed to roughly one-quarter of single men.
It’s not surprising that women are more likely to worry about the future than men. The gender wage gap has narrowed in recent years, but there’s still a big difference in women’s overall earnings compared to men’s, which translates to an even bigger difference in savings. Even though women are working just as hard as men – if not harder – to save money, invest wisely, pay off debt, and cut expenses, they’re still much more likely to find themselves falling short when it comes time to retire.
There’s no definitive way to say whether women are “better” with money than men, or vice versa. Rather, each sex has its own particular strengths and weaknesses, and both could learn a few useful lessons from each other.
For instance, women as a group would be better off knowing a little more about basic financial concepts like compound interest and inflation. They’d also benefit from having more confidence in their ability as investors, so they’d be less likely to procrastinate when it comes to investing outside of a company plan. Additionally, they could take a page out of men’s book when it comes to taking risks with their money to get a higher return.
Men, on the other hand, could benefit from a dose of women’s caution and prudence with money. They could avoid many problems by being more cost-conscious when shopping, more wary of debt, more diligent about investing in their workplace plans, and more willing to do research before they invest. They could also learn to seek help when they need it, whether that means getting investment advice or seeing a credit counselor.
What do you think is the biggest difference between men and women where money is concerned?