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5 Myths About Women & MoneyFinancial Literacy


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With only 23% of Certified Financial Planners being women, you might think the fairer sex isn’t all that interested in money matters.

You’d be wrong.

The idea that women either aren’t interested in or capable of managing money is a myth that seems to bubble under the surface of our consciousness. The politically correct don’t want to say it out loud, but it’s there. It’s a bit like when Barbie blurted out that math class is tough! People were collectively offended by the comment and yet some secretly thought, But math is hard for girls.

In reality, some women — like some men — really don’t care about money management, or they think it’s too hard to understand. However, there are plenty of women who are actively involved in charting their financial future. A 2012 survey by Allianz Life Insurance Company found half of women surveyed say they have a great deal of responsibility for major financial decisions, and 62% expressed a strong interest in learning more about finances and retirement planning.

Here are some major misconceptions about women and money:

1. Entrepreneurs Are Overwhelmingly Men

When you think of an entrepreneur, who do you picture? A millennial male in Silicon Valley with a tech startup? Certainly, if your idea of entrepreneurship is limited to tech start-ups, then you’d be forgiven for thinking small business is a man’s world. After all, only 3% of technology companies are founded by women.

However, women entrepreneurs can easily be found elsewhere, whether it’s starting a business from the ground up or signing on for a direct sales company. American Express reports women are starting 1,288 new businesses every day in the United States.

The 2013 United States Report from Global Entrepreneurship Monitor finds men are more likely than women to be entrepreneurs but overwhelmingly so? Nah.

2. Women Don’t Know How to Invest Properly

You can choose your stereotype here. Depending on whom you ask, we are either too timid to invest aggressively, too dumb to understand our options or too ignorant to care. Well, people would probably say these things a little more nicely, but the general idea is still the same.

While surveys do support the idea that women aren’t necessarily the most confident group when it comes to financial planning, they also don’t suffer from overconfidence that can be detrimental in investing. In fact, a woman’s more reasoned approach to investing might be one reason their returns can outpace those of men.

In fact, if you’re planning to invest in hedge funds, you should probably seek out one of the women in the field to manage it. Female hedge fund managers have beat the returns of the HFRX Global Hedge Fund index for most of a decade.

3. Women Can’t Help But Spend Their Way to the Poorhouse

Ah, yes, here’s the idea that women are too busy filling their closets with shoes and handbags to have any money left over for more practical pursuits. As a woman who has a closet containing far too many handbags, I will confess that every stereotype has a smidgen of truth in it. However, the fact some women overspend in certain categories doesn’t translate to women being poor money managers.

If we want to be real, men seem to be the ones more likely to spend too much and save too little. An analysis of 2013 Vanguard data found women were significantly more likely than men to participate in their employers’ defined contribution plans, or 401(k)s.

For example, among those earning $50,000 to $74,999 annually, Vanguard found 79% of women participated in their available plan compared with 60% of men. In addition, across income groups, women save at rates 6% to 12% greater than those of men.

What’s more, Experian noted in 2013 that men had 4.3% more debt than women. They also took out bigger mortgages and were late on their payments more often than women. In fact, in every area measured by Experian, women edged out the men.

4. The Gender Wage Gap Isn’t Real

As of 2013, women who worked full-time and year round earned only 78% of the wages pulled in by their male counterparts. The American Association of University Women says a gender pay gap occurs across virtually all occupations, and even men working in what are traditionally considered female-dominated fields earn more.

The reasons for this are not cut and dried. Some of it might be that women are less likely to ask for raises and when they do, it can reflect poorly on them. Family life undoubtedly plays a role as well. I have seen more than one female friend turn down a job with a big title and cushy paycheck because they preferred to be home at 5 p.m. with their kids. Personally, I traded raises for the opportunity to spend more days at home and fewer days in the office.

However, these reasons don’t entirely explain away the pay gap. The AAUW notes that women who are just a year out of college are already at a disadvantage, earning only 82 cents to every dollar brought in by a man.

Seeing that women earn less than men, I’d say their ability to save more and go into less debt is all that much more impressive. Am I right?

5. Women Are Content to Leave Money Management to Men

And here we come full circle back to the myth that we discussed at the start of this article. It’s the myth that women simply aren’t wired to worry about money. It’s the suggestion that when given the choice, we’d all rather be coloring our hair instead of balancing the checkbook.

In the real world, women are just as interested and involved in money management as men. Consider these statistics from the Allianz study referred to above.

  • 55% of surveyed women say they research new investing and retirement options.
  • 57% say they primarily handle major investment decisions and retirement planning themselves.
  • 59% say they are the ones who teach their kids about money.
  • 60% say they handle the tax preparation in their household.

What do you think? Are women unfairly stereotyped when it comes to money matters?

This post originally appeared on Money Talks News and was written by Maryalene LaPonsie.