5 Money Management Misconceptions about Women in Society

Today we have a guest post by Tina Roth.  Check out her bio at the end of the post.

Women have always been discriminated against. Women have been denied several rights – the right to vote, the right to work outside the home, and more. Time has changed now, we live in a gender neutral society where men and women are considered equal.

But distasteful stereotypes about women still exist. Women lack driving skills, women are bad at STEM – these are all stereotypes. It’s time we debunk them – once and for all.

But before debunking them, let’s have a look at them. Here are the 5 money misconceptions about women.


Bad at Money Management

The media portrays women as impulse shoppers. And the public happily picks up on that portrayal. There are two factors that feed this misconception. First, women mostly buy fanciful stuff – fashion accessories, clothes and cosmetics products. Such purchases are looked at in a negative life.

Secondly, the definition of impulse shopping is not accurate. Last minute purchases are not always impulse purchases. It’s true that we don’t spend money from the original budget for last minute buys. But that doesn’t make them impulse purchases. A woman forgetting to add some items to the list and then suddenly remembering them when she’s almost done shopping is not rare. Such buys may be last minute, but they are necessary.

Money management has got nothing to do with gender. Still, women get the blame for managing money poorly. This needs to change. Anybody can learn the money management pro tips, whether it’s “he” or “she.”

Women have a different way to manage money. They discuss money matters with others in the family – their spouse, brother, sister or best friends. Women expect others to get involved. Men, on the other hand, prefer solo act. Those who are completely naive about finance hire a professional.

Just because women have different money management skills, doesn’t mean they are bad at it. This flawed notion needs to be shrugged off.

Related: 4 Apps to Automate Saving (And Save More Money)!


Women Hate Risk

It is a major assumption that women hate risk; however, there is no evidence to support the claim.  Only half-baked studies and common myths are cited to substantiate it.

An economist Julie Nelson rubbished this claim saying “Instead of difference, similarity seems to be the more prominent pattern, with well over half of men and women ‘matching up’ on risk-related behaviors in every study.”

No scientific study ever suggested that women are against taking risks.

However, the studies do point out that men and women view risk differently. Men feel taking risk is same as being reckless, which is not true. Women, on the other hand, prefer taking calculated risks. A survey done on affluent women by Spectrem Group sheds some light on this. Among 400 women surveyed, 216 said they’d invest in high-risk ventures such as hedge fund, commodities, real estate, etc.


Lack of Retirement Planning

In the past, women were less serious about retirement planning. Then the 2008-recession hit the US and shook the economy. When the layoff spree finally ended, employees were found taking retirement planning way more seriously than before.

Women began to show interest in IRAs and explore the retirement options provided by their employers. At the end of the recession, the number of women enquiring about retirement options was 72%, up from 47%.

Annuities haven’t been as popular among women as 401k, 403(b), Solo 401k, Roth IRA and HSA. Interestingly, these retirement plans are popular among men as well. This further proves women have been planning for retirement as seriously as men.

Related: 4 Things Millennials Need to Do Now for Retirement


Women Lack Investment Knowledge

Nothing can be further from the truth. Financial literacy has nothing to do with gender. A study on financial literacy found women are knowledgeable but they often lack the confidence that men can easily muster up. Again, the lack of confidence owes to the essentialist idea that women lack investing skills. So in a way, it’s like a vicious loop.

Women have the same skills as seasoned investors. Fidelity’s research shows men save 7.9% of their salaries while women save 8.4%. A good investor knows the importance of saving regularly. Since women are doing just that, they must be good on the investment front.

The flip side of confidence is you fail to see the risk areas. A study done by an economist called Terrance Odean shows that men invest more often than women, but the odds of failure are higher for men.

Related: 3 Apps to Start Investing with $5 or Less 



Some argue women don’t possess diverse investment skills. They are wrong. Women possess skills that are as diverse as men’s. Let me cite the Merrill Lynch survey, done on 5000 people. Among the surveyees, 55% men and 50% women said they extend their investing skills to other areas in finance.

There was a gap of 5%. For high-income women, the gap is even smaller. Members of the high-income group are privileged enough to access financial information from trusted sources, have contacts who can introduce them to the right people and give them right advice. Apparently, women are taking advantage of all these perks and in the process of building a diversified investment portfolio.



Society will continue to progress. The old values will lose significance, the new values will become mainstream. A day will come when there will be no need to counter the deep-rooted superstition about women’s inability to manage money or invest because people will mature enough to laugh out all the misconceptions that we have discussed here.


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Tina Roth is the personal finance blogger and her personal finance blog is the answer to the very basic questions around personal finance. A writer by day and a reader by night, she loves to discuss frugality and unique money saving ideas. Find her on twitter here: @profinanceblog.


Editor’s Note

Although women have come a long way in society as Tina mentioned, there still are many disparities between genders.  Women earn less than men in virtually every occupation where there is substantial data. In 2015, female full-time workers made only 80 cents for every dollar earned by men.  Those numbers add up quickly.  According to a recent CNN article, in 2014 the median income for men was $50,383, whereas for women it was $39,621.  That breaks down to a $10,762 annual difference or $897 per month.  The numbers get even worse when you take into account minority women.

The wage gap alone puts women at a disadvantage for paying down debt and investing for retirement.  According to a recent Time article, a woman who works full-time over a 40 year period loses $435,480 in lifetime income.  Although women have better money management skills than assumed by society, it still puts us at a disadvantage.

All is not lost, though.  It is important for women who want to get ahead in their finances to truly focus on good money management skills and saving often for retirement.  If you are looking to discuss, your financial skills on a more personal level with me, schedule a free 15-minute consultation here.



  1. There are definitely a lot of misconceptions about women. I have never paid any attention to any of that stuff, just made my own way and not pay any attention to white noise.

  2. Neglect retirement planning? Girl the way I set up my 401k, I plays no games. I can honestly say when I was younger, I was careless with my money, but now it’s save, save, save when I can.

  3. SMH at these misconceptions. We are the largest group of risk takers. Not only do we take risks with our money, we take risks with our hearts everyday!

  4. I agree! There are so many misconceptions. I have dealt with it for so long now that I’m just like… okay… underestimate me if you want. LOL

  5. I for one have never thought about delaying retirement savings. I’m not trying to be in my glory years and broke!

  6. I’m so glad that you touched on this. People think that women just shop and ask for money from their significant others. Not TRUE! Thanks for breaking the stereotypes.

  7. I’d personally love to see more women investing and learning how to wisely invest more. I think many of these myths were true in the past when more women were homemakers, now women are also making money and are highly educated so there is a greater need for women to invest and take financial risks.

  8. I totally agree with what you’re saying even though I’ve been off work for a year. women are successful in every part of life.

  9. It’s sad that people think so little of us. I think it is fun to prove them wrong though. That way they have to change their opinions.

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