Important note: Starting stories with “When I was a little girl” – as my great-grandfather did with me – used to reliably make my little girls giggle hysterically. Now they just roll their eyes because, whatever, #DadJokes.
Anyway, then I got older, and I learned about percentages. For starters, women in this country earn seventy-nine percent of what men earn. Women live about five years longer than men on average, making the ‘running out of money in old age’ problem more acute. And although women may be the primary earner in 40% of households, they are still more likely to take on primary care for either young children or sick or elderly relatives – difficult tasks that may alter their earnings power over the course of a lifetime.
Adding to that problem, a 2007 research paper supports the idea that women who negotiate for higher compensation are perceived differently – and worse – than men. The study showed ‘ambition’ in a man regarding pay negotiation can appear to be ‘pushiness’ in a woman. The differences in perception may explain part of the pay gap between women and men, upping the difficulty level for women to earn as much as men.
These important real-world differences present extra challenges for women as compared to men.
Having said that, I have an instinctual aversion to the idea that women and men do or should think about finance and money differently. I mean, even if the challenges are greater for women, it doesn’t mean that women have different thought processes or solutions.
I sat on a panel recently in which an audience member began her question with a statement that “women think differently about money, so…” and I cringed. I felt like her statement was approaching something like the “Talking Barbie” who said “Math class is tough!” Thankfully Mattel recalled that version of Talking Barbie.
Do women think differently than men about money? Honestly, I have no idea.
As of now, I don’t plan to raise my daughters from the perspective that ‘money is different’ because they’re girls. They’re still going to program amortizing loans into spreadsheets before they get braces on their teeth. They’ll still have to calculate compound interest and discounted cash-flows before celebrating their quinceañera party. I think we can all agree that’s just “the basics” for any kid growing up these days, amiright? Boy or girl doesn’t matter.
But who knows, maybe my spouse will raise them differently, and they will gain a gendered perspective? At the very least, they will absorb the idea that Mommy thinks money is yawn-inducingly boring and Daddy thinks it’s super fun, and undoubtedly we’ll both be wrong – because parents always are.
I recently read Women, Money & Prosperity: A Sister’s Perspective on How to Retire Well a book promising to teach women how to deal with the special financial challenges they face.
The advice was fine, as far as it goes, along the lines of:
- Understand the value of time as it creates wealth through compound interest.
- Pay for things with cash rather than credit, if you can
- Pay all your bills on time and jealously guard your credit score
- Try to diversify your income sources in retirement
- Understand a thing or two about investments
- Consider starting a business
- Track your finances, including possibly making a budget.
I have no objection to the author’s advice, but it all struck me as non-gender specific. Yes, women earn less money, are still more likely to have careers interrupted mid-stream, have more need for money in retirement because they live longer, and get penalized for asking for a raise. But all those challenges make me think that just means the average woman needs to be more disciplined than the average man when it comes to money.
But it doesn’t necessarily mean women “think differently” about money, or that they should do something differently with their money.
A few years ago I reviewed what I consider the worst personal finance book of all time, Peace and Plenty by Sarah Ban Breathnach. Ban Breathnach had earlier become famous as an Oprah-approved author for a book called Simple Abundance.
Later Ban Breathnach suffered a disastrous romance and lost all her Simple Abundance royalty money, and she wrote the terrible follow-up Peace and Plenty.
Since I wrote my review, every once in a while I get a note or comment on that post from a Ban Breathnach fan, upset by my mean words. Frequently the objection is something along the lines of “you’re a man, the author wrote this finance book for women, and you wouldn’t understand.” They are right that I don’t understand that book, but I disagree that women could possibly find the book useful. Men and women may be from Mars and Venus respectively, but neither gender has a monopoly on a complete lack of judgment, right?
I expect some women will insist to me that their thought process is different and that maybe I should check my privilege? I’m open to that feedback and interested in what I’m missing in terms of the differences between men and women when it comes to money.
A version of this ran post in the San Antonio Express News.
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 Also vomit-worthy from that talking Barbie: “Party dresses are fun!”
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