If you ever read the book, “Men are From Mars, Women Are From Venus,” you know there are some significant differences between men and women. But did you know this also holds true when it comes to men and women and money? There are some very substantial differences between the way men and women think about money, how they see money and how they spend money. And this isn’t just our opinion either. There has been a substantial amount of research done that supports these differences. Some are commonsense differences like it doesn’t take much research to determine that women spend more money on clothes then men and that man tend to eat more. But there are other differences that are not quite so obvious.
Men and women handle money differently
It can’t be argued that men and women are different in many ways. And one of them is how they think about money.
One of the ways that women think differently is that for them money is about a lifestyle; while for us guys it’s more about winning and losing. This is a key difference.
Women want to know what to expect. They will monitor their investment returns and need to know how they can achieve their goals. On the other hand, men tend to take a more casual approach and shoot from the hip. In fact, women tend to become better at managing money once they have the necessary financial tools in hand.
As a general rule men feel more confident towards their finances and their money at the rate of 58% versus 44% for women. This could account for the fact that 28% of men who responded to a survey reported they always negotiated their salaries compared to only 19% of women.
Again this won’t come as much of a surprise but men also spend more of their money on electronics and technology at the rate of 54% to 23% for women. On the other hand, women spend more on travel – 43% compared to 33% of men.
Personal finance topics
In terms of topics about personal finances that appeal to men, a survey found they were more interested in investing (83%) and entrepreneurship (54%) while women’s preferred topics had to do with savings (79%) and living frugally (67%).
Lack of financial savvy
A retirement survey done recently by ING Direct and DailyWorth found that 78% of women don’t think they have the necessary financial savvy and are still learning to plan their retirements. In addition, one third of married women admit that they give the power for their retirement planning to their spouse or significant other. This same survey discovered that 49% of all women wish they knew more about the basics of investing such as picking the right funds or stocks and risk management. In addition, 37% of them said that they didn’t have enough time, were put off by complicated Wall Street jargon and had trouble with everyday expenses that stopped them from being savvy investors.
Men and women see money differently
There are a number of ways that men and women see money differently and here are 11 of them.
- Men are encouraged to learn how to invest and make money grow while women are socialized to save money “just in case” something happens.
- As a rule, women buy what they want while men buy what they need
- While men tend to use money to keep score, women use it to take care of others
- Men use money to prepare for the future while women use it to create a lifestyle right now
- Men take investment risks but women are cautious about investing money
- Women spend money on people they care about and on relationships. Men spend money on themselves
- Men ask for what they want while women ask for what they believe they deserve
- Men view money objectively; women view it in terms of relationships
- Men learn how to be savvy investors while women expect other people to know more than they do
- Women tend to gravitate towards helping professions such as teaching, which doesn’t pay very well, while men look for higher-paying jobs
- If women have a financial hardship they want to be fair. When men have financial problems they advocate for themselves.
How men and women handle money
Studies have shown that men and women handle money much differently from one another. While this is not always the case, it is true that both sexes’ spending habits relate closely to their financial plans for the future and their lifestyles. Here are five of those major differences.
The need to eat versus the need to wear
In the same world where men spend money to eat, women spend it on clothes. In fact, many women engage in what’s called “retail therapy.” A survey recently done by eBates and TNS Global found that 64% of women agree that their mood is lightened when they shop with the emphasis on cosmetics and clothing. Conversely, men tend to focus their shopping on food, movies, music and electronics.
Being well-dressed vs. alcohol
As you might guess, alcohol is a staple of male spending. The Bureau of Labor Statistics recently reported this. Its report suggested that a single male of drinking age will spend an average of $507 a year on alcohol. In comparison a woman will typically spend $216. On the other hand, women spent an average of $524 annually to look and feel good as opposed to $194 for men.
Giving more
The Center on Philanthropy reported in 2010 that women donated money at a much higher rate to charitable causes, than contributions made by men. Specifically, women-led households that had incomes above $100,000 annually donated almost twice as much to charities as households that were led by men.
Money and special occasions
This probably won’t come as any surprise but Valentine’s Day seems to be the big spending occasion for men. According to reports, 64% of males hand over big bucks for flowers and candy. In fact, they spend an average of $175.61, which is nearly twice the $88.78 that women spend.
From sales to retirement to being broke
Men save 28.8% more money towards their retirements than women. This is especially true in 401(k) s and it’s about the same for IRAs and other investments where men maintain balances that are 72% higher. On the other hand, women take 40% longer to make a purchase and are more likely to comparison shop for better prices than men. Interestingly enough, men either go broke or have the potential to go broke when there are no women around.
Men and women spend money differently
How do men and women spend money? Given all of this, you shouldn’t be surprised to learn that men and women spend money differently. As noted above, women give more to charity and men spend more on booze. Single ladies spend more to look right and men spend the most on Valentine’s Day. As noted above, men tend to save more for retirement. Men spend a bit more on nightlife while women are more patient for online deals. And this may surprise you but women may be better at paying back loans.
Here’s an infographic that illustrates the differences.
Who’s the best at handling money?
Historically men have been better at handling money in many cases because they did all the handling. But things are different these days. Today, women are about half of the US workforce and control 50% of the wealth. They’re getting better about handling money and many of them do even better than men. So men may be better at it today but the gap is definitely narrowing.