Women and Money: Slaying Stereotypes and Facing Reality

I agree with April–there needs to be more financial advice for women that is based on women’s real needs, not just some stupid stereotype.

In addition to what April mentioned, women are often left in desperate straights after a divorce.

They usually end up raising the kids, and they are less likely to have invested in creating a financially viable career for themselves.

Unfortunately, many women view even thinking about what they’d do if they got divorced as a threat to their marriage and values.

They’ll buy life insurance to cover the low chance that either they or their spouse will die before the kids are grown, but they won’t even consider the much more likely situation of divorce.

Head in the sand–not a good strategy, actually.

I think the short answer to your question is no. There is so much information flying around on broad subjects via standard publications, ebooks, blogs, and traditional websites people have to focus their topics to niche groups. When this happens people usually discuss a broad topic and then find a way to spin it to their niche audience. I don’t think there is anything wrong with it, I just think most of it is redundant. Even this blog is an example. How many personal finance blogs are out there? This one focuses on people who prefer to “Get Rich Slowly.”

I actually think there are lots of good resources for women out there; ‘Ask for It”, Suze’s books – so I don’t think there’s a gap in the market there.

Although it can be a stereotype – there are female shop-ahaulics and there are girlie-girls; if these books get people who wouldn’t normally think about personal finance to learn more because they are being marketed to, I see the good outweighing the cringe-inducing titles,

We live in a time with a diversity of subcultures and situations in the U.S..

There are middle aged women who can’t keep or get men because they earn so much money. There are also women the same age who have been supported by their husbands or parents their entire adult lives.

I think there is a market for both sets of books that April writes about.

I don’t like how the books mentioned seem to imply that most women’s financial issues just come from over-shopping. There are much deeper issues that society doesn’t want to address. How about being too reliant on your husband for income/retirement? I think women are too trusting. I have a co-worker who admits she shops too much, but she also said that her husband is her “retirement-plan” and that they didn’t have a will, 10 years into marriage with 2 young children. Those second items are much more serious to me than some excess shopping.
I think women are socialized to be too-trusting, and to not think of the worst-case scenario. Some men (and women) and other people are just out to use you and your money. And if you’re married, that doesn’t mean you should count on that level of income for the rest of your life. But who wants to admit that they have a back-up plan for their marriage not working out?

Fantastic article, April! Thank you so much for this and for doing solid research on this topic. This is the best article I’ve read on GRS in quite a while.

If I recall correctly, Smart women finish rich does do a good job of addressing actual (on average) differences between men and women without going into stereotypes (like Rachel #11 says). Of course, it really isn’t much different than Smart couples finish rich or any other David Bach book with a differentiated title, maybe 20% different stuff. And don’t forget the classic Babcock book, Women don’t ask.

I would be remiss if I didn’t throw in a link to a recent rant of ours on Women and money vs touchy-feely stuff, though it is not anywhere near as researched as this one. http://nicoleandmaggie.wordpress.com/2010/12/20/women-need-more-money/

I wonder if some of the “shopaholic” label gets put on women because a large number of them that have husbands and children do end up doing the majority of the shopping for the whole family. They buy groceries, toiletries, clothes, home furnishings for themselves and maybe 2,3,4 or more other people. That, by necessity, entails alot of shopping. Personally, I don’t know too many men that buy shampoo, underwear, and clothes for themselves or their children (or wives). But I do know many women who buy all that and more for everyone in their household. Just a thought….

I wrote a pf book for women because we need the advice more than men — we still earn less (on average), amass fewer retirement dollars, and need that money to last longer because we live longer — and historically haven’t gotten it. The spending piece breaks down this way: New research shows that women aren’t any more likely to be excessive spenders than men are. We do buy different things. Us: Clothing and gifts. Them: Technology and gadgets. But we also do 80 percent of the spending, so if you look at the dollars in the overall, we’re doing more damage. Follow me: @jeanchatzky.

As long as they have good content, any book that will educate people about their finances is good no matter how silly the title.

I do agree with the need for more education about retirement, though I believe both genders could use help with this. (But yes, generally speaking women face more lifetime hurdles.)

I’ve never seen a personal finance book which delved deeply into negotiating skills, but it is a great idea. I’m a perfect example of the need for it.

Wife.org is a decent website geared toward women who haven’t controlled the family finances and are coping with divorce.

Women do face certain financial challenges. As someone above mentioned women tend to be more financially devastated after divorce than men – they also end up with the child care. Although I don’t know if this is fact it does seem to be what I have witnessed.

It is fact that women outlive men. We need to prepare for this. You need to know your family’s finances and be prepared to take them over upon the death of a spouse.

Men also face gender specific issues – like leaving their spouse/family in good financial shape given an earlier demise. Traditionally men provide for the family – there are social pressures that come with that expectation.

So gender specific books probably do have a niche market for either sex.

I agree with shorty j—I also guess that the kinds of things that people buy vary in a statistically significant way with gender.

When I was married, we had separate accounts. And it is true that my ex-husband paid for the mortgage while I paid for everything else. The reason we split it this way was that he couldn’t be bothered (or relied upon) to keep track of all the individual bills and pay them on time, and he also couldn’t be bothered to go out and purchase groceries, TP, light bulbs and other household supplies.

Naturally, when we split up he complained about how I was “always spending tons of money” while he in contrast had been “investing” by paying the mortgage. While in actual fact we had each contributed an approximately equal amount to our living situation.

I have heard other men complain about their wives’ spending in the exact same way…

I dislike the stereotype that most of women’s financial issues come from overshopping and the notion that women shop more than men. I don’t think they do. They just shop differently. My husband goes on a field trip to CompUSA every weekend. He doesn’t always buy something, but about half the time he does. He loves computer stuff, the same way that some women love shoes.

The challenge of women and careers/retirement saving/lifetime earnings is a tricky one. On the one hand, it’s wrong and unfair to assume that because a hard worker is a woman, she is more likely to leave one day to raise a family. On the other hand, that is often the reality. How are employers to deal with this, and treat women equally while at the same time hedging against the inevitable truth that some of them will not be long-term?

The first (and bible) finance book I read was by Jane Bryant Quinn- suggested to me by my female stock broker – who had been left high and dry by her lawyer husband (that she had put through law school). It was the late ’70s and Anne was determined I would never be in the same spot. She insisted that we begin saving for MY retirement since my husband would have a pension. My “retirement” money bought our first house for cash- and is at a pretty penny now.
I never read the “fluffy” looking money books. Not even Suzi- because she never raised a family.
I think the spousal IRA is a joke! I think people should be able to contribute to SS for a non working spouse. There are many unequal problems with careers for women.
I feel for my daughter as she struggles- knowing that she is very bright and could make a lot of money- but choosing to raise the next generation. WE fund her IRA right now- as her Christmas and birthday gifts.

If there are any women who do some semi-foolish thing, X, there will be articles decrying women and how foolish they are for doing X. Then, even women who do X in a most sober and responsible way will have their choices and decisions commented on by others and called a “silly Xer.”

For instance, LifeAndMyFinances, when psychologists do studies on emotional eating, they find that there is no correlation between emotional eating and weight. However, overweight women are told that their problem is emotional eating, forgetting the fact that skinny women eat emotionally as well.

The problem is when the negative diagnosis becomes embraced rather than used as a navigation chart.

@20 Emily. When I took Women in the Economy in college, one of the striking statistics in the textbook was that men and women are EQUALLY likely to leave a job. The difference: women are more likely to leave for family responsibilities. Men are more likely to leave for a competitor. At least in the 1990s, women were more likely to stay at one job conditional on being working, whereas men were more likely to job hop. As an employer, which would you rather have?

It is just more available, easier to remember, when women get big with a child, have the baby and don’t come back. Men leaving for a better job doesn’t stick in the mind as vividly. The stereotype occurs because of mistakes using the availability heuristic. I’ve seen this heuristic in action with an IT department over a 4 year period… a woman left to have a baby, a man left for a better job, another man left because he was arrested by the FBI. Are they less likely to hire a man because they’re afraid of federal investigations? No, they don’t want to hire a woman because they’re afraid she’s going to leave for a baby.

If I were to guess, I would say that men and women are probably still equally likely to leave a job, but women are starting to look a bit more like men in terms of staying in the labor force, and men are just starting to pick up childcare at home. These are, of course, exacerbated by the recession which has seen a larger decline in men’s employment than in women’s.

Your average “PF for women” book makes me want to vomit. It assumes that women spend so much on shoes and handbags that they can’t pay the rent each month and just assume they’ll be able to flutter their eyelids and get by, or else hide it all under the carpet, a la “Confessions of a Shopaholic”. Women are humans just as much as men, with competent brains. However, one must, as Sarah the commenter said, think about the difference between personal expenses. Women’s haircuts are more expensive and we are just expected to wear makeup.

The worst shopaholic I’ve known was a guy, at one point he had his home filled and 4 storage units filled. He was constantly juggling money to try and make all the payments and using one credit card to make minimum payments on the other. When all this was going on he was still making purchases – most of it through eBay but he’d find good “deals” or go to garage sale and pick things up.

I know at one point he managed to get down to 3 storage units, but then do to his compulsive shopping and bad money management he lost his house and had to move into an apartment.

When I lost touch with him he was still doign the same thing – juggling payments so he wouldn’t lose the storage units and still buying more.

I agree with your perspective. I have never bought a book specifically aimed at women mainly because of the sexist slant. I read the unisex classics that speak to ‘everyone’.

The best personal finance book that I read several years ago is by a woman author, Suze Orman, and is called The Money Book for the Young, Fabulous, & Broke. It does not, in my opinion, reinforce stereotypes of men or women, but is targeted to the strengths of young people and building wealth.

Great post. As a woman very interested in personal finance, I’m very concerned about saving for retirement especially when I plan to stay home with my future children.

I really wish the working world was more forgiving to mothers. I’m a highly educated, hard-working young woman, but having a family is a huge priority for me and leaving the workforce to do so will probably alter my career path permanently. Ionia a lot of people think you can “do both”, but you really can’t. Not without extreme sacrifices like delaying having children or choosing to have less children or settling for a lower position on the job ladder.

Maybe I have no right to complain because I’ve made my choice, but I can’t help but feel how different the corporate world would be if we just accepted having a family as NORMAL and accommodated parents accordingly.

I’m glad I’m not the only one who saw those girly titles and thought of pink tools -though, in my case, I thought of the pink microscopes I saw in the toy aisles.

Two things – wait, three things – occurred to me that were potentially interesting to others.

First, a book recommendation: Elizabeth Warren’s “The Two Income Trap.” her research is a fascinating look into bankruptcy, and he did find some interestingly tendered correlations. The one that stuck with me was that the most reliable indicator for whether an individual woman would go through bankruptcy was whether or not she was a mother.

Second, in our household, we made an interesting – and, honestly, questionable – decision about retirement when we hit a rocky financial time; it might be useful to share it. Basically, when my DH lost his job, we made the choice to fund only his Roth, and we’ve been doing that for two years now. Granted, I continue to have an employer sponsored plan, but even if I didn’t, we would have made this choice because DH is older than I am.

We can use his retirement savings earlier than mine. I figure that we’re not unique in valuing his savings more in times of scarcity due to age – let’s face it, women are still subject to a stigma if they have relationships with significantly younger men.

Last, I wanted to build on the idea that women are socially programmed to “be nice” – where nice = not looking out for our best interests. This plays out in generally lower salary negotiating skills, sacrificing our retirement to fund expenses for others, and career-altering choices like staying at home for our children.

The thing that really strikes me about this is that, in reality, it is in our family’s best interests to look closely at each of these choices, but it is really hard to force (myself!) ones self to do so. For example, my retirement savings directly affect the likelihood that I will be a burden on others at the end of my life.

I think that there are definitely some special considerations regarding finances for women vs. men, and it’s important to address those. Women are still only making 82 cents to every dollar earned by a man, have careers that tend to be a lot more disrupted by family, and additionally are still facing glass ceilings in many industries. (93% of people with my job title are men – 93!)

That said, there’s a big difference between addressing real issues and playing on stereotypes for the sake of making a quick dollar. There’s also a big difference between books with useful information and real substance and those filled with fluff.

Suze Orman’s ‘Women and Money’ is a great one that I can recommend, but even more so, ‘On My Own Two Feet’ by Manisha Thakor and Sharon Kedar – it’s a small book filled with common sense and a simple approach to budgeting and planning for the future.

Women aren’t the only ones whom experience niche marketing in the world of personal finance. Minorities do as well. From Girl, Get Your Credit Straight! to Se habla dinero?: The Everyday Guide to Financial Success, there are an incredible amount of personal finance books available to traditionally underserved markets. Having read mainstream personal finance books and niche PF books based on gender, age, religion, or ethnicity, I can report that they are all redundant. Spend less than you earn, contribute heartily to retirement plans, always have a financial plan, give back to others, and contribute to your child’s college savings if you can. And yet, this redundancy is important. While niche PF books play on stereotypes for sales, they impart valuable lessons to their readers.

To be politically incorrect for the sake of honesty, sometimes people just don’t like the messenger, regardless of the message. A SAHM many not like the idea of reading a PF book with a picture of the author on the cover who happens to look like her Dad. Latinos may appreciate PF books that embrace their language and heritage. Blacks may like PF books that balance personal responsibility and community uplift. Really, it is all just marketing designed on the part of publishers to generate sales.

Personally, my favorite niche PF book is The Complete Idiot’s Guide to Personal Finance in Your 20s & 30s by Sarah Young Fisher and Susan Shelly. This age-based book is a great starter guide for young people entering the workforce for the first time or recent college graduates. The best mainstream PF book in my opinion is Dave Ramsey’s Total Money Makeover. The idea of “total debt elimination” is revolutionary because of its common sense principles. If you’re interested in a painful reality check, anything written by Gail Voz-Oxlade will sober you up pretty quick.

Long-time reader, first time poster because this topic is dear to my heart.

I am the target audience for these books and I have picked up a number of these over the past few years. Waste of time – I’m a person first.

The only female-focused financial book that helped me was “Nice Girls Don’t Get Rich” http://www.amazon.com/Nice-Girls-Dont-Get-Rich/dp/044657709X

The other helpful books were either general audience; focused on an age segment; or focused on an aspect of building wealth.

I read recently that women, in fact, have some distinct advantages when it comes to investing. Studies have shown that female investors are less apt to buy high and sell low, and are more able to analytically judge a stock based on fundamentals rather than emotion, and will generally outperform men in stock picking. Just thought it was interesting.