Women may spend more on shopping, but they also donate more to charity than men do.

Here’s how women approach money differently than men do

‘Men are from Mars; women are from Venus’ may be a trite saying but it’s also undeniably true, considering just how starkly different the two can be regarding certain things. Whether it’s relationships or money, men and women function in their own unique way. That makes sense, because the kind of experiences, biases, struggles, and expectations that men and women go through are often very different. 

Not just that, science has shown there are differences in the shape, size and neural structures of the brains of women and men. With all these differences evident between the sexes, their approach towards money – spending, saving, and investing – is very interestingly varied as well. 

1. Spending

You might have noticed the difference yourself while going shopping with your partner. It’s not just that women tend to spend more time when shopping; overall, their spending behaviours are pretty different, shopping and otherwise. Let’s examine this aspect in greater detail:

  • Shopping and sales – Women tend to be more mindful about shopping at outlets that offer their favourite brands at lower prices. They also tend to look for sales more consciously than men when shopping online. And why not? Being strategic when it comes to shopping is just as important! 
  • Switching to store brands – A Nielsen study indicates that women are more likely to switch to less expensive grocery store brands to save money as compared to men. This is especially true when there isn’t much product differentiation, as is the case with most FMCG products, and the quality is similar.
  • Reading and education – As per a study conducted by the Bureau of Labor Statistics (BLS) in the US, millennial women spent about $850 more on reading and education than men. Think about it for a minute and you may realise that the stereotype of girls being more ‘bookish’ and focused on their education may just be true! 
  • Food and alcoholic beverages – Single men tend to spend more money on eating out or ordering in compared to single women. The amount of money that men spend on alcohol is almost twice as much. 
  • Donations to charity – For the same income bracket, women tend to donate more to charity than men do. The Institute of Fundraising, UK, found that 54% of women had given money to a charity in the previous year compared to 40% of men. Moreover, about 66% of women had bought goods from a charity store compared to 36% of men. It’s not just money; women are more generous with their time as well when it comes to giving back to society.

Related: Men vs Women: Spending habits

2. Saving

Studies conducted around the world show two things. First, women tend to save more than men. Second, women are paid less than men for the same jobs. This translates to a sad fact – even though women save more, because they earn less, their savings end up being less than that of men. 

For instance, if a woman earns Rs 60,000 per month and saves 20% of her income, her savings would amount to Rs 12,000. On the other hand, her male colleague who saves 18% of his monthly income of Rs 75,000 (for the same job) ends up saving Rs 13,500. 

Let’s now look at some other saving trends these studies have revealed:

  • Emergency fund – Men tend to have almost twice as much money stashed away in their emergency fund than women do. This is something to seriously consider changing, since an emergency fund allows you to have quick access to funds during times of need. 
  • Lifetime savings – From the example above, it can be calculated that men save almost three times as much as women, on average, over the course of a lifetime. The struggle for women here isn’t to save more, since women already save a higher percentage of their income, but to fight against the wage gap.
  • Employment duration – Another difference between men and women that affects how much they earn (and hence, save) is their employment duration. Women, due to pregnancy and motherhood, tend to have a shorter working period than man. It’s not just maternity leave; many women take a few years off to raise kids before they officially get back into the workforce, if at all. 

Related: Here's why women are better than men at managing finances

3. Investing 

Traditionally, women were not given access to money nor had a say in money decisions in the family. All the investment decisions were made by men. Of course, times have changed, but due to this tradition, men are more confident and proactive when it comes to investing than women are. Women are more conservative in making investment decisions and find it more intimidating than men. 

Let’s consider the differences when it comes to investment preferences:

  • Investment knowledge – In 2014, the US-based Global Financial Literacy Excellence Center (GFLEC) published a report that showed only 51% of women understood financial concepts like interest and inflation as against 59% of men, when both were asked to take a test. 
  • Seeking professional help – Whether it’s to manage their investment portfolio or for financial advice, women are more likely to approach a finance professional. Even when women invest independently, they tend to do more research than men. A lot of this can be attributed to prudence than lack of knowledge. 
  • Taking risks – Women are more risk-averse than men when it comes to investing, and tend to park their money in instruments such as fixed deposits or public provident fund (PPF), both of which are low-risk and low-return investments. 

Related: Financial freedom means different things for men and women. Here’s how

Research conducted on investing and money behaviour in men and women mostly conclude that women are less confident than men when it comes to managing money. This also means that women tend to hand over the control and decision-making of their money to the men in their life – fathers, husbands, brothers. 

The confidence aspect is key because even when women know more, they feel they don’t know enough. As a woman, you need to give yourself more credit and place more faith in your knowledge and understanding of money. Trust your gut, channelise your girl-boss energy, and take control of your finances – that’s the most effective way to empowerment and freedom. Check these 6 Investment strategies that men can learn from women


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