Over the last century or so, society has made tremendous strides toward gender equality on every level. This includes how men and women manage money. Today’s culture has further narrowed the gap between the sexes. The caricatures of the “overspending wife” and “overworked husband” have nearly become extinct.
Despite society’s advancements, there are still significant differences in the way each gender relates to and manages money. Dozens of studies have been performed on this subject, with research culled from around the globe. Being aware of these differences helps us understand how we deal with finances so we can build on our strengths.
Attitudes towards shopping
Men and women look at shopping very differently. A study by the Wharton School of Business titled “Men Buy, Women Shop” found that women are more likely to view shopping as a recreational activity, while most men just want to get out of that store with their purchase as quickly as possible. Because of this, women are quick to notice a store’s environment and the way the salespeople treat them.
How the genders manage money regarding spending habits
A Consumer Expenditure Survey by the Bureau of Labor Statistics studied the spending choices of single women and single men. Here’s what they found:
- Overall spending: Single men outspent single women, but only by a slight margin. Men spent an average of $35,018 a year, as opposed to $33,786 by women. It’s important to note, though, that the men earned roughly $10,000 more per year than the women.
- Food: Single men outdid women here, too. Their annual food bill was $4,173, as opposed to $3,680 for the ladies. They also spent over double what women spent on alcohol, at $537 a year compared to the women’s $234.
- Clothing: Women came in first place in this category. They spent an average of $1,140 on a category titled “apparel and services” while men spent $813. Typically, women’s clothing costs more than men’s, even for similar items.
- Cars: Men outstripped women in this category, spending a total of $5,507 a year on personal transportation costs, compared to women’s $4,273.
- Entertainment: Men and women spent similar annual amounts on entertainment, but they chose to spend those dollars differently. Men spent an average of $835 on “audio and visual equipment and services” but only $206 caring for pets. Women spent $725 on their home entertainment and $488 on their pets.
It’s not just the spending numbers that set men and women apart, though. There are multiple studies proving that women are more price-conscious shoppers than men. According to PaymentSense, 71% of women say the last item they bought online was on sale, compared to only 57% of men. Women also use coupons more commonly than men, with CouponFollow’s 2017 Millennial Shopping Report showing that 74% of millennial women will look for coupons when shopping online, compared to 65% of millennial men.
How do the genders manage money when it comes to financial goals
Which gender has bigger dreams?
That question is difficult to answer because when it comes to how men and women manage money, they tend to have different priorities for their savings. A recent survey by The Motley Fool found that men are most likely to name saving for a vacation as their top financial goal, followed closely by paying off credit card debt. Women had identical goals, but they put their credit card debt first and their dream vacation second.
Although men and women have similar financial goals, there’s a difference in how much money they set aside. A recent report found that men had set aside nearly twice as much money for their long-term financial goals as women. A BlackRock survey published by CNBC had similar findings: American women nearing retirement age had an average of $81,300 in retirement funds, while their male counterparts had $118,400.
However, if you look at the percentage they save from their paychecks, women come in first place. A recent Vanguard study found that women are more likely to participate in workplace retirement plans and that they put up to eight percent more of their pretax earnings into these plans than men in the same earnings bracket.
The difference between money saved and income percentages earmarked for savings is because the average woman still earns less than the average man. As a result, a female saving 10 percent of her salary may have less money saved than a male saving eight percent of his paycheck. Add compound interest into the mix, and you have the current gap between the accumulated savings of men and women.
There have been copious studies performed on how men and women manage money when it comes to investments. Most conclude that men are more confident in their financial knowledge and more open to risky investments, while women are more cautious, future-focused investors. Not surprisingly, studies have found that the average woman’s investment strategy and eventual performance tend to be more stable than the average man’s.
Men also seem to take more of an interest in investing. The Black Rock Survey found that 70 percent of millennial men enjoy managing their investments compared to just 36 percent of millennial women.
There is no right or wrong approach to how to manage money and finances. However, with an open mind and the willingness to learn about our natural strengths and weaknesses, we can all improve our money management skills for building a life of financial wellness and success.
Your Turn: Do the money habits of most of the men and women you know match up with the findings of these studies? Tell us about it in the comments.
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