Top 5 Ways that Women Differ from Men when it Comes to Money: and Girl, You’re Gonna Want to Know Why
The COVID pandemic has shaken all of us to the core- but none more so than women. The pandemic prompted a She-cession worldwide– describing how women are disproportionately and adversely impacted by the economic fall out of the pandemic. This has prompted a lot of us to rethink our lives and most importantly our finances, or lack thereof.
Making the most with little is the reality for most women around the world: we earn less, live longer, work more unpaid jobs, and manage household finances, all more than our male counterparts. This coupled with the fact that under 1% of us invest globally will mean not only that we will forever be trapped in the hamster wheel of labour, but that we will do so for 40 years only for 80%of us to retire in poverty.
The pandemic has brought this stark reality into relief for a lot of us. And many of us are questioning our relationships, our jobs, our goals and our purpose on this planet. And overwhelmingly, the consensus among women is clear: the status quo is insufficient and I want and deserve more.
Our financial futures are bleak. But they don’t have to be. Bixie and its partners want to help women take control of their financial futures, driving them towards a future where we can live with stability and dignity and where work can mean more than just an (underpaid) paycheck, but where we can realise careers and lifestyles that we dream of.
The goal is financial freedom.
But first things first: if we want to understand why we’re so far behind men when it comes to our finances, we needn’t look further than the mirror, and a financial industry that refuses to tailor finance to our unique profiles.
#1 We don’t invest because we lack confidence and we lack confidence because we lack knowledge
This was one of the most important research findings in the past decade regarding women and money. Why? Because it established the causal link to explain why women are just not investing. It’s not a lack of money, or access, or experience: it’s a lack of knowledge and our ignorance is costing us at least $1M in our lifetimes, and presents a $5 trillion dollar market opportunity for savvy female financiers.
#2 Whereas men experience shame when it comes to money, women experience anxiety
With few financial institutions collecting gendered data and designing based on female needs, is it a surprise then that the finance industry focuses on privacy and confidentiality rather than soothing anxiety? The financial industry is intimidating, even to women with advanced degrees who work in finance. We need to do a better job of allaying female fears around finance, rather than assuaging male senses of shame.
#3 Women Make Financial Decisions as a Group
We evolved sharing resources way back in the cave– while the male folk were out hunting and gathering — and we’ve made decisions on scarce resources distribution accordingly ever since. Cooperation and discussion to manage risk is a global phenomenon on how women make financial decisions: from susus in Ghana to paluagans in the Philippines, women have been de-risking their investments through each other for generations. Yet, such practices are absent from formal finance.
#4 No Experts, No Robots
Women prefer real people to give them advice, not chatbots or suits. And we prefer to receive financial advice from other women who have been in our situation who managed to find a way through it. Finance experts, financial robots are unlikely to support women along their financial journey, so a proliferation of these tools in finance services alienate us.
#5 We’re Really Good Investors and Investments
So when we do take the plunge to invest, we’re actually pretty good at it– better than men are on average in fact. Once large-scale study published by Forbes showed that we yield higher returns than men, in part, because of our more thorough research itch. We also have higher repayment returns for loans than men, and as part of industry best practice, women are the targets of micro-finance schemes worldwide, not men, because we are considered more reliable.