4 Harmful Myths About Women And Money

Written by Marc Adrian

You’ve heard it before: women are bad with money, women spend too much on shoes, or women are bad at investing. Perhaps it was a punchline to a joke, or an off-hand remark made by a friend. Most of the time, you’d probably just shrug them off and go about your day. 

But negative stereotypes like these can be harmful. They influence other people into treating you differently and can even have damaging effects on your performance and abilities.

Besides, some of these generalizations can be inaccurate. So this International Women’s Day, we’re debunking four myths about women and money – and hopefully, put them to rest for good.

Myth 1: Women can’t save cos they shop a lot

Do an image search for ‘shopping’, and you’ll see pictures of people carrying heaps of shopping bags. Most of the people pictured will probably be women. 

Is this image accurate?

While it’s true that women are more likely to shop than men (12% of women vs. 8% men according to Janio Asia),  it’s worth noting that 6 out of 10 mothers manage their family’s expenses and budget. That goes without saying that we entrust our finances to women and that they’re definitely capable of making sound financial decisions, and even saving money! The same study said that only 21% of women are able to have savings, but not for selfish reasons like shopping for non-essential, rather they take care of their family’s necessities first. 

Myth 2: Women don’t fare as well in business 

The traits we associate with business – such as planning, risk-taking, and innovation – aren’t typically associated with women. 

But perhaps we should start. US-based venture capital firm First Round examined 300 start-ups and found that companies with a female founder performed 63% better than those with all-male founding teams.  

In the Philippines, a report by The Global Entrepreneurship Monitor noted that there are more women (58%) involved in entrepreneurship at the early stage as well as in established business (55%). On involvement in entrepreneurial activity by gender, their report also found that more women have been involved in early-stage entrepreneurial activity in the Philippines. 

Myth 3: Women are worse at investing 

Women are often told that they don’t invest enough, and don’t take enough risks. After all, the investment market is dominated by male sharks. 

However, research suggests that women tend to take less risk because they generally have lower net worth and are more likely to experience uncertainty with their income. Risk-taking behavior also depends on context – a Harvard Business Review study found that impact investment firms took more investment risks when there were more women in their top management teams.

Those who do invest aren’t necessarily bad investors. Recent studies in the US showed that female retail investors slightly outperformed their male counterparts, partly perhaps men traded more (and incur more trading costs). Goldman Sachs also found that 48% of female-managed funds outperformed the market last year, compared to 37% for all-male funds. On the other hand, a study by Morningstar found that gender did not affect fund managers’ investing performance. 

Meanwhile, in the Philippines, there’s a growing number of women in one of the prominent investment platforms in the world. According to eToro, women in the Philippines account for over 26% of investors in the region. Given that investment platforms become more accessible to everyone, women willingly participates and can do as well as men in managing their portfolios.  

Myth 4: Women shouldn’t handle money because they are not good at math 

Math performance and gender can be controversial subjects. An OECD report that looked at PISA (an international student assessment) results found that boys outperformed girls in maths on average. But this could be due to girls’ lack of confidence, which was associated with lower scores. The report pointed out that when girls are reminded of negative stereotypes about being worse at maths, they performed worse than the control group. It added that “there is no innate reason why girls should not be able to do as well as boys in mathematics”. 

If you do happen to be bad at maths (perhaps for reasons unrelated to your gender), don’t worry. Making good financial decisions – such as spending less than you earn or figuring out the asset allocation of your investment portfolio – only requires basic math skills like subtraction, addition, and division. For more complicated scenarios, such as estimating your monthly installments on a home loan, there are tons of online calculators that can help you do the job.

Make better financial decisions 

If these harmful myths have ever discouraged you from taking charge of your financial life, we hope that debunking them will help.

After all, making better financial decisions can help you reach your goals and improve your quality of life. Everyone – regardless of gender – should strive for it. 

Happy International Women’s Day!