Research shows they may not be as responsible.
A new study shows men are more confident in financial decision-making than women. That doesn’t mean they’re making smarter decisions.
The Knot just released a financial survey called “For the Love of Money.” The wedding planning website polled more than 1,000 adults in relationships, with the big takeaway that women in heterosexual relationships say they’re less confident about managing money than their spouses.
More than half (51 percent) of men feel they “make smart financial decisions” but only 4 in 10 women say the same.
Specifically, men feel they have a firm grasp on paying taxes and investing their money in the stock market and cryptocurrency. Previous Debt.com reporting shows overconfidence doesn’t always translate to responsible choices.
“When you’re overconfident, you overspend,” says Howard Dvorkin, CPA and Debt.com chairman. “You’re positive you can pay off that hefty credit card bill. You’re sure your gambles in the stock market will bring big returns. You just know you’re getting a huge raise or bonus in a few months.”
Below we break down gender stereotypes in money. If these couples communicate their views on money, they can build a solid foundation together.
Less confidence, better saving, same habits
The differences between men’s and women’s financial habits are pretty slim.
A survey from Bankrate found that women are better at saving. Although the majority of both genders save less than 10 percent of their income, nearly 30 percent of women save more than that compared to 21 percent of men.
Although women are better at saving, they’re pretty much equal to men when it comes to their spending habits.
Nearly half of women (49 percent) spend less than a tenth of their monthly income on shopping splurges. That goes for about 45 percent of men, according to Bankrate. Even closer, four percent of women spend more of their income on wants instead of needs, compared to three percent of men.
“So, while women are often stereotyped as being bad with money, this data shows that women and men have similar financial habits,” Bankrate concluded. “Women being a bit more conscientious about saving and men a bit more frugal on spending.”
It’s impressive that women are able to maintain better saving habits and similar spending habits. The gender pay gap is still very much alive. Women are also faced with the “Pink Tax,” meaning that products advertised as feminine often cost more. The Pink Tax can cost women an additional $1,300 a year.
Sharing the burden
Although different genders have different financial experiences, that doesn’t stop them from working together as a couple.
The Knot’s research found that 65 percent of heterosexual couples talk to their partner about finances at least once a week. That number jumps to 77 percent in LGBTQ couples.
Even better, 8 in 10 feel like it’s easy to talk to their partner about finances. Having those conversations sets expectations. Half of the couples who responded said that one person has more say than the other when it comes to finances. The other half said decisions were made equally.
There’s no right or wrong answer, but couples need to do what’s best for them. Nearly half of those who said one person has more control said that it causes imbalances in other areas of the relationship. About 30 percent said it causes friction.
But no matter how often a couple communicates about their money, it all means nothing if someone is lying throughout the process. Dishonesty around finances was the top financial deal-breaker for most survey respondents.
“You need to know that your partner’s goals are aligned with your own or it will eventually create friction in your relationship,” Dvorkin says. “If one person is a saver and the other is a spender, it doesn’t mean the relationship is doomed. However, you need to be open and honest so you can figure out how to move forward together as a couple.”
If you’re wondering how to manage your finances as a couple, Debt.com can help. Money is the number one relationship stressor. So by being open about income, debt, and budgeting you can avoid the pointless men vs. women debate.
Find out: Budgeting for Couples
Published by Debt.com, LLC