It’s time to bust some money myths so that women feel more confident and empowered to make their own money and investment decisions.
Myth 1: Women are bigger spenders than men
If you’re like me, you would have loved Sex in the City, starring the tenacious Carrie Bradshaw. Yet Carrie, while successful in so many ways, was a disaster when it came to spending money.
While women are often portrayed as big spenders, it’s a myth that they spend more than men.
Now, it's true that women spend more than men on clothes. But men spend more on other luxuries, like takeaway, alcohol and cars. And more often than not, while women might spend more frequently, men tend to spend bigger.
So overall, men spend more than women. Frivolous spending has nothing to do with gender.
Myth 2: Women are not cut out to be the family's main money decision-maker
Nope. Not true. Women’s Agenda conducted a survey last year called “Women and the Barriers to Investing”, which found that the majority of women hold significant power when it comes to family finances, with four in five (79 per cent) saying they were responsible for the majority of purchasing decisions in their household.
Myth 3: Women are not as good at maths as men
Certainly not! Studies have shown that women are as good at maths as men. In a great article in The Scientific American titled, “Are Boys Better Than Girls at Math?”, the author argues that various academic studies show that girls have similar results to boys when it comes to maths results.
However, what she notes is different is girls’ attitudes to maths—which tends to be less positive: “They have higher levels of math anxiety and lower levels of confidence in their math skills. This means even when girls show similar performance levels to boys, they are often less sure of themselves.”
Myth 4: Women are not interested in money and investing
This may be the case for some, but research shows that it’s not true across the board.
The “Women and the Barriers to Investing” report mentioned earlier reveals that more than three-quarters of the women who participated in the survey have "specific financial goals" they are looking to achieve or have achieved.
A similar study conducted by asset manager Fidelity, “The Financial Power of Women”, also asked individuals about their barriers to investing. A lack of interest, knowledge and information was only marginally more of a barrier to women than to men.
But, there is an issue when it comes to trust in investment providers. Four in five (81 per cent) women said they lack trust in investment providers and this stopped them from investing.
Myth 5: Young women are more likely to be engaged with money than older women
Unfortunately, this is dangerously not true. A recent US study found that 1 in 5 women had abdicated to their husbands all financial responsibilities—and the rate was higher among younger women than those age 50-plus.
Myth 6: Men are better investors than women
No. In fact, the opposite is true. Consistently studies have shown that women are better investors than men.
One study by Fidelity compared the investing behaviour of 8 million retail customers and found that women outperformed men by 0.4 per cent. As the study explains, “At first glance this may appear to be a negligible difference, but it can have a significant impact over time.”
What makes women better investors? The big difference is that men were inclined to trade while women tended to stick to their investment plans—a strategy which seems to pay off for women in the long term.
Myth 7: Women are too risk-averse to invest
Somewhat true in that women are more risk aware, which in reality is different to being risk averse.
In fact, women’s risk awareness is a virtue. Women tend to take more time to make investing decisions—recognising that investing is complex—which keeps them from making the mistakes we see so many men make: Trading shares and chasing the latest shiny investment idea or hottest stock pick.
Start investing today
As women, our financial stakes are high. We live longer and earn less than men. We may also take career breaks to care for our families. Yet these realities put extra pressure on our financial wellbeing.
Don’t let these seven myths stand in your way. Get started on your investment plan today.
My book, The Joy of Money, co-authored with Julia Newbould, is a great place to start.