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The myth that women are inherently bad at managing money is pervasive. From TV and films to the language used in adverts and magazines, there’s a recurring theme when it comes to women and finance: The female big spender.
It’s obvious in Carrie’s designer shoe obsession in Sex and the City. It’s the main gag in Confessions of a Shopaholic. It’s also there when a magazine presents an “online debt quiz” or a “money horoscope” as legitimate financial advice. Men make the money, and women spend it.
Research has shown huge discrepancies in the way men and women are spoken to about money, particularly in the media. In 2018, researchers at Starling Bank carried out linguistic analysis of about 300 finance articles from the UK and other countries — 65% of those aimed at women defined them as “splurgers,” excessive spenders with poor judgment who needed to “rein in” their spending and “limit” their outgoings in order to save.
If an article was aimed at a female reader, financial planning and budgeting was portrayed as overwhelming, stressful and scary. The imagery used was infantile or anxiety-inducing, showing women counting pennies or being crushed by a huge credit card. Conversely, articles intended for a male audience were far more likely to talk about portfolios, calculated risks and opportunities, with a heavy focus on strength and power.
But where did the trope of women being financially incompetent come from — and what impact does it continue to have on women’s finances?
“It’s not too long ago since women in the UK weren’t allowed a mortgage or a credit card in their own name, so the idea that women are bad with money goes back generations,” says Kate Sang, a professor of gender and employment studies at Heriot-Watt University.
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“Historically, men were the breadwinners and women were denied access to their own finances or even denied information about their family’s financial wellbeing. We forget that before 1970 it was legal to pay women less than men for doing the same work, so how could women demonstrate financial literacy when they had little money to manage?”
When the first credit card was launched 50 years ago, it was mostly marketed at — and used by — men. In the 1960s and 1970s, women were seen as a far riskier investment by banks. Even if a woman earned more than her husband or father, she still had to get them to sign for most loans. And although women were in charge of household budgets, their husbands ultimately held the purse strings.
“The stereotypes of women being bad with money likely have their roots in this patriarchal divide of family finances,” Sang explains. “Although last year someone told me that period poverty exists because women don’t know how to balance the family budget well enough to prioritise their own needs — so these ideas are not history, sadly.”
The idea that women are less savvy when it comes to managing their finances is a myth, as research has shown that men are equally as likely to overspend. Additionally, the assumption that all men are inherently financially astute — and therefore less likely to experience debt, or ask for advice — is damaging too. But research shows women are disproportionately affected by these gender stereotypes, which negatively impact their finances, health and careers.
“We know that women are less likely to seek financial advice, likely because they have less disposable income to invest,” Sand says. “Women are more likely to live in poverty, work part-time and in lower paid jobs, and experience a pension divide. We only have to look at the WASPI (Women Against State Pension Inequality) generation to see the effects of associating men with financial management skills, and women with domesticity.”
Even from a young age, parents may teach their children differently about money depending on their gender. According to a survey of 1,000 parents conducted by Giftcards.com, respondents were more likely to teach their daughters fiscal restraint, while their sons were more likely to be taught about building wealth.
It’s likely this will contribute to women’s financial habits, expectations and personal finance knowledge later in life. Earlier this year, a US Bank survey of 3,000 women and men found nearly half of the women polled associate negative emotions with financial planning — and are less engaged with personal finance than men.
It’s not surprising, then, that men report having more financial confidence than women and that 56% of women leave investing decisions to their partners.
Cultural stereotypes about women and money may also lead to psychological consequences too, according to a 2018 study by Drake University assistant professor of psychology and neuroscience Jill Allen. In two experiments with 179 college women, the researchers found evidence that priming the concepts of money and femininity undermined their performance on a test of cognitive functioning.
It’s clear we are long overdue a rethink about how we talk to women about money. A lack of financial awareness isn’t just about closing the pay gap or protecting incomes, but autonomy too. “As more women enter the labour market, pursuing highly skilled and better paid careers, there’s more need for financial planning tailored for women,” Sang said.
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