People who think that women and men have the same mind about personal finances is clearly delusional. You have to realize that there will always be a difference between male and female financial security because both are psychologically different. Despite the fact that both sexes have the same opportunities presented to them and women can enter most of the male dominated sectors, they will always approach things differently. It all has something to do with their respective roles in the household and the specific mind frame that they each possess.
For instance, when someone gets sick in the family, it is the women (or specifically mothers) who are more inclined to miss work to take care of the ailing relative. This is not because society expects them to do it but more because women are naturally more nurturing than their male counterpart. That quality compels them to prioritize their personal life over their careers.
But how does this affect how women manage personal finances differently than men?
What differentiates women from men when it comes to financial matters
Although men and women make household decisions collaboratively, they assume different roles in their home. Most of the time, the financial responsibility is put upon the shoulders of the men. But although this is the norm, more and more women are starting to step up as the breadwinners in the household.
The 2012-2013 Prudential Research Study indicates that there is an increasing number of women who are becoming the primary breadwinner in their family. They are also noted to have a key role when making financial decisions – but most of the time, it is not by choice but born out of necessity. In fact, only 23% of women feel that they are ready to take on this task compared to the 45% of men who feel the same.
Here are some important highlights of this study that will indicate the differences between genders and shed light as to where the female financial security really stands.
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The female financial priorities are primarily influenced by household expenses.
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13% of women view themselves as “financial beginners” compared to 3% of men.
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A higher percentage of African Americans and Asian Americans are employed full time and they display a higher confidence when it comes to reaching their financial goals.
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Asian Americans are more inclined to use a financial advisor.
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43% of women VS 37% of men feel that they are living modestly and financially independent.
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3% of women VS 7% of men are financial secure and able to do what they want, when they want it and where they want to do it.
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Women and men are tied at 9% when it comes to the percentage who are falling behind financially.
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53% of women are primary breadwinners (single, married/with a partner).
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22% of women who are married or living with partners earn more than their significant other.
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20% of women VS 45% of men feel they are prepared to make financial decisions.
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29% of women VS 35% of men feel that they need to catch up on a lot of areas when it comes to financial education.
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In decision making, 73% of men claim to be the primary decision makers.
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35% of women VS 21% of men in a marriage or living with a partner admit that they share equal responsibility in making financial choices.
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19% of women VS 38% of men take control of the overall finances.
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When taking risks, women are more cautious when investing. 70% of women VS 60% of men are savers rather than investors.
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22% of women VS 40% of men enjoy investing like a sport.
Source: Financial Experience and Behaviors Among Women, 7/2012, http://www.cgsnet.org/ckfinder/userfiles/files/Pru_Women_Study.pdf
This study and the figures within indicate that female financial security is present but compared to men, they are still lagging behind. Although a lot of them are more confident, most of the women with a partner or spouse look unto their companions to help decide on financial decisions. There is certainly respect for women when it comes to their opinion about personal finances but it is still dominated by the men in the household.
Female characteristics that affect their personal finances
Women may be stepping up when it comes to financial security but it is evident that they have a lot to learn – especially when it comes to building up their confidence about their money. Given that a lot of them are earning more and taking a more prominent role in society compared to previous generations, it is a must they they step up their financial game.
Like men, the female financial security is greatly influenced by their characteristics. Here are some of them.
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Women tend to prioritize household expenses. Women naturally run the household so compared to men, they know the details of what is needed in the home. This explains why most of their financial decisions are generally influenced by what the whole household needs.
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Women are known to have a longer life expectancy. This means they have to be more prepared for their retirement. They need to put aside more money to make sure that they have enough to support their basic requirements. They live an average of 4-5 years more than their male counterparts.
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Women are more prone to shoulder child rearing expenses after a separation or divorce. This makes them more vulnerable financially and prone to economic difficulties.
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Women are expected to prioritize their family more than their career. As mentioned earlier, this is attributed to the nurturing quality of women – which is naturally more prominent than men. When someone is sick, they are more expected to stay at home to care for them. This means employers will be more inclined to spend for them when it comes to benefits and leaves.
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Women are more inclined to leave their careers to raise the kids. This makes it difficult for them to re-enter the workforce when the kids are a lot bigger. It impacts their career development and can affect their income generating abilities.
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Women are less confident to take risks. This makes them very timid investors. This is an area where female financial security has to be strengthened greatly. It may be given a boost if women take more time to understand the process and benefits of investing.
In the end, you can assume that men and women will always be different when it comes to managing their personal finances. It may be immature to determine which of them is better at it. Given the differences in personalities and their respective roles in our society and personal household, they will always take a different approach. You need to expect that men and women will have varying strengths when it comes to their financial capabilities.
An important note is that women will have to start prioritizing their retirement. The statistics on their retirement plans is not as strong as it should be – considering that they have a longer life expectancy. Much has to be learned but there is time to do it – at least, this is true for the younger generations.
One thing is for certain, women will gain more ground when they learn more about personal finances. As it the same with men, financial education will help anyone gain more confidence when it comes to managing their money. This is what will lead to a more successful female financial security. Taking control of your money could prove to be very beneficial for your own personal financial advancement.