Like baby ducklings, we get imprinted early in life by our parents. We watch and listen and absorb how they relate to money which forms the basis of our own money scripts.
It’s not a shocker to say that women and men are socialized differently in how we’re expected to relate to money. Expressions like, “men make the money, women spend it” abound. Even the language around women and money is loaded. In 2018, an international study reviewed 300 finance articles and found that those targeted to a female audience used words like “splurgers” and “spenders with poor judgement”; and described the financial world as a “minefield”. In contrast, articles targeted to men linked money with status and the buying of luxury goods, such as expensive suits, as “investments”. This reinforces gender stereotypes that work against achieving full financial potential.1
In addition to structural obstacles, such as lack of pay equality and other forms of gender discrimination, there are also self-inflicted and limiting money mind-sets. Fortunately, we can shift those mental and emotional barriers. But first, we need to identify them:
Money scripts
At home...Societal norms reinforce the idea that, in heterosexual relationships, men should earn more than women. According to research from the U.S. Census Bureau, husbands inflate their income, whereas wives diminish their actual income. In relationships where the woman out earns the man, the couple is more likely to separate.2
It’s common for women to abdicate financial decision-making to their spouses. A recent study by UBS Global Wealth Management found that both younger (age 20-34) and mature women (age 51-plus) were likely to do so.3 In a 2014 Wells Fargo survey, 66 per cent of women reported that no one had educated them about the stock market.4
Women tend to put their family’s needs ahead of their own. While this is noble, it can also be self-defeating leading women to pass up lucrative promotions and to postpone retirement savings in lieu of paying student loans.5
At work...
One of the key sources of our wealth is human capital. It’s the ability to convert our skills and energy into income.
It’s been observed that men will apply for a position if they meet 60 per cent of the qualifications but that women will only do so if they meet 100 per cent of them. This relative lack of confidence prevents women from applying for bigger jobs – and organizations from benefiting from the wider talent pool.6,7
A report by McKinsey Global Institute estimated that over USD$12 trillion could be added to the world economy by 2025 simply by advancing women’s equality; and up to USD$28 trillion if women reached full employment parity with men.8
Salary negotiations are an integral part of working life. Studies show that women tend to signal a willingness to accept lower pay.9 Although both genders are uncomfortable asking for raises and promotions, a study of millennials by VISA found that women were twice as uncomfortable asking for a raise but as likely as a man to ask for a promotion. They were also more likely to equate money with security whereas men were more likely to equate it with freedom.10 Women tend to internalize the belief that it’s unfeminine to focus on money and that the quality of their work alone will bring financial recognition.11
Unfortunately, even when women ask for raises, they are less successful than men. In a large study of 4,600 employees over 800 different workplaces, men and women were matched in how often they asked for a raise. Men were more likely to succeed and to receive a higher raise (20 vs 15 per cent) when they did.9
In life...
In a breakthrough study, researchers at Princeton and Harvard Universities discovered that people who feel financially insecure as well as time-pressed perform more poorly on cognitive tests. Because their brainpower is going to day-to-day survival, they have less “cognitive bandwidth” to make strategic decisions and engage in long-term planning.12
Although the study did not look at gender as a factor, women report feeling more financially stressed than men and they often juggle work and household duties making them feel time-stressed. This may be one reason that women are more likely than men to rely on shopping for “mood regulation” – aka “retail therapy” – and to feel more guilty about making personal purchases.13
Rita Silvan, CIM™️, is personal finance and investment writer and editor. She is the former editor-in-chief of ELLE Canada magazine and is an award-winning journalist and tv media personality. Rita is the editor-in-chief of
Golden Girl Finance , an online magazine focusing on women’s financial success. When not writing about all things financial, Rita explores Toronto’s parks with her standard poodle.