Money: A Woman’s Perspective

The pay gap, women’s longevity, and gender roles are important considerations in financial planning.

December 7, 2015

Men and women have different views of money, according to Science.  A recent survey indicated “There are four main categories that we associate with the content of our bank accounts: security, power, love, and freedom.”

Women are twice as likely to correlate money with love and emotion, and men twice as apt to view money “as a sign of power and freedom.”

Researchers believe understanding different gender perspectives will assist men and women in awareness of their financial beliefs.

Variances in sentiment toward money are not the only differences between men and women when it comes to financial management and the role dollars play in everyday life. Read on to learn how women in particular experience money, and consider how you might accommodate their needs and preferences.

‘Your problem is to bridge the gap which exists between where you are now and the goal you intend to reach.’ --Earl Nightingale, author and radio personality

“Women’s long fight for equal pay and work opportunities is far from over, according to a new report from World Economic Forum that estimates it will take another 118 years—or until 2133—to close the gender gap worldwide,” reports. 

At present, the global average full-time salary for a woman is $11,102 annually, compared to a man’s average salary of $20,554.

Today, women’s wages are equal to those men earned in 2006 when men earned $11,351 and women on average earned $6,117.

The data, however, is somewhat questionable due to the wide variety of countries and many variables contributing to a wage gap.

Meanwhile, at home, Fed research shows “Gender Wage Gap Narrows for New Women College Grads,”  another NBC news story reports.

“While studies have long shown the gender pay gap to be a stubbornly persistent phenomenon—with women earning somewhere between 77 and 78 cents for every dollar earned by men—a new analysis… indicates that it has substantially narrowed for young college graduates,” the article notes.

Currently, of grads ages 22 to 27 “near-parity in pay is the new norm,” as women bring home 97 cents for every dollar a man earns. And, income for women in some fields outpaces that of men: Women in treatment therapy earn an 11% premium, and women in social services have a 16% wage premium.

Still, the analysis reveals that for women, by mid-career, “every one of the occupational wage advantages will have vanished” and men have an added 15% wage premium between the ages of 35 and 45.

Of further note, “Women Now Control More Than Half of U.S. Personal Wealth” says Business Insider. This trend is likely to grow: “About 51%, or $14 trillion, of American wealth is now controlled by women.”

Given women’s money responsibilities, it is prudent for financial institutions to understand their unique needs and habits.

 ‘In investing, what is comfortable is rarely profitable.’ --Robert Arnott, American entrepreneur

Should Men and Women Manage Money Differently?” asks Money. “Men and women face different challenges when it comes to their money,” the story reports.

Because of the gender pay gap—here reported as 25.6% according to a PayScale study—and because women have a longer lifespan and may have had time off from their careers, they have different financial needs.

In addition, women may not be as confident when it comes to making investment choices.

“All these differences have broad financial implications when it comes to… long-term planning.”

The article covers a discussion of the issues by a panel of financial experts who determine women like a collaborative approach to investing and cooperative decision making with their spouses. Women also prefer to have spending money of their own while “Men are more likely to want all assets merged.”

Further, women “generally are dissatisfied with the advice they’re getting from professional advisers” and would like help on many issues like charitable giving, career development, and higher education.

Financial tasks should be manageable and a “Focus on three key goals or three steps to take, not 37.”

Female Breadwinners Need Advisers’ Help Talking to Their Partners about Money,” says InvestmentNews.

More than 70% of women breadwinners want adviser help in communication with partners as part of money management. “Being a woman and the main earner in the family can make life complicated,” says the article, as gender roles don’t apply and “modern couples make up the rules as they go along.”

“Having a safe place to discuss these matters is attractive to these women who often don’t know where to turn for help.” Institutions that provide this assistance will differentiate and cement consumer relationships.

Three tips for financial advisers to help navigate these nontraditional money management conversations:

  1. Consider the “adviser couple mindset” and remain neutral as you listen to concerns of both partners.
  2. Have fun with the discussion and incorporate coaching exercises and creative resources like “money mindset cards.”
  3. Be an active listener and ask open-ended questions. Do not choose sides.

Another financial concern for some women is managing money without a partner. A recent article in The New York Times reveals many couples do not plan ahead for the day when one of them dies.

Women need to know about life insurance policies, investments, and how to pay the bills. Assist by providing checklists for widows, guidelines for retirement readiness, and other tools to help women who want to handle finances on their own.

‘It does not matter how slowly you go so long as you do not stop.’ –Confucius

Retirement saving is important for both genders, and slow and steady progress is one way consumers can win the race for future financial security. The literature is contradictory in reports of which gender is better prepared.

Women are Beating Men at Retirement Savings,” says The Atlantic. Longer life expectancy means women need to save more for retirement.

A Vanguard study shows women are 14% more likely to contribute to workplace-saving plans and “women are crushing men in participation rate at every income level.” Women with incomes under $100,000 have a participation rate 20% above men.

Still, men have larger earnings and as a result have greater retirement savings.

“And with women living longer, this means less to live on until the gender pay gap closes,” says the article.

Another study from the Insured Retirement Institute shows 80% of women are concerned retirement funds are lacking, and 54% of them are “very concerned,” says

However, compared to men, “women report less trouble in ‘just finding the discipline’ to save,” a challenge for 26% of men and 18% of women.

Women still believe they don’t save enough: 41% indicate they are “a little behind schedule,” a belief shared by 36% of men. But 22% of men say they are “far behind schedule,” compared to 17% of women.

The pay gap, different views on money, longevity, savings habits, and gender roles are all significant factors for consumers on meeting daily as well as long-term financial goals.

Do you understand the woman’s perspective? How can you help accommodate her unique financial needs?

LORA BRAY is an information research analyst for CUNA’s economics and statistics department. Follow her on Twitter via @Bray_Lora and visit the CUNA blogThe Research Roundup: Economic Perspectives.