The Truth About Women & Money

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In our work with couples, we see it time and time again: women playing second-fiddle to their partner when it comes to money. Whether it’s because they feel like they’re “not good with money,” because they came from a family where their father figure managed the finances, or they make less than their partner, there are a number of reasons why women shy away from money decisions.

But there’s one thing we really want to make clear: women are good with money, too. There are statistics to back us up. tit

Survey Says: Women Are Good With Money

A 2017 study by Fidelity Investments showed that:

  1. Women earn 0.4% more on their investments than men, which adds up dramatically over a lifetime.

  2. Men trade their stocks 55% more than women do. This means men may lose money in transaction fees, taxes, and growth — whereas women have more patience to stay the course.

  3. Women save a higher percent of their income for retirement accounts and/or IRAs. 

A 2017 Vanguard survey also found that more women enrolled in their work 401k and 403b plans, and that they put 2 - 8% more of their pretax earnings into them compared to men. But it’s not all about investments and retirement.

There are a number of other statistics showing how women handle everyday finances, as well.

  1. On average, women spend about $1,500 less a year on discretionary items (clothing, restaurants, etc.) than men do. 

  2. Women are more likely to look for sales when making everyday purchases.

  3. Women spend less on transportation and vehicles. 

  4. Women often have longer-term views of their finances, and start saving for larger events like housing, college, or retirement sooner than men. 

But there is one major factor to consider in all of this. Despite the fact that women set aside more of their income for savings and investments, they make less money than men doing the same work. This means that, despite their best efforts, women often struggle to experience the same financial successes that men do. 

That’s why, whether you’re a single woman or in a committed relationship, it’s important to understand a woman’s money behaviors and beliefs, rather than just looking at the numbers.

Women Face a Lot of Challenges When it Comes to Money

Women, point blank, face a unique set of challenges when it comes to money. These obstacles include:

  1. Wage gaps. Women in the US may make $0.80 for every dollar earned by a man.

  2. Lower income. 56% of women live paycheck to paycheck versus 41% of men.

  3. Decision-making experience. Only 25% of women say they are a primary or co-decision maker in their households.

  4. Separate finances. Nearly a third of women (31%) keep money and love separate.

  5. Taboos. 61% of women say they’d rather talk about death than money.

  6. Lack of confidence. 40% of women say they’re overwhelmed by money, and 31% feel discouraged. Only 9% of women feel empowered in regard to their finances.

On top of that, money is the leading cause of stress in relationships, and as a result many women may shy away from these subjects to try and “keep the peace.” But we want couples (and single women) to start talking about money — and to realize that women can (and should!) play an active and influential role in money decisions.

Changing the Way Women Think About Money 

How many times have you read an article about “how women can be better with money” or “startling finance statistics every woman should know”? Here at Everyday Money, we think this sort of language makes it harder for women to see their capabilities with money. That’s why we’re sharing the stats above, and why we’re asking everyone to communicate more about money. 

We think it’s so important that women especially start talking about money, whether they’re in a relationship or single. Understanding the challenges women face with money (like the wage gap) can also help put money differences in perspective. Because the more women talk about their experiences with money, and the more women start taking an active role in their finances, the better everyone’s experience with money will be.

Women have a special set of skills to bring to the table when it comes to money, as do men. Making sure everyone feels empowered with their money is what makes financial decisions and wealth-building easier. It also makes us all happier.

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