Today on Ask the Bitches, we’ve got a GREAT question about whether women need different financial advice than men. And it was asked by… A MAN?!
(Cue: crashing thunder, rain SFX, opening cords of “It’s Raining Men.”)
That’s right, doubters and haters. Despite our joyless misandrist ways, we’ve got male readers. We’ve even got male readers who are so into what we talk about they’re willing to pay us for our work by becoming Patreon donors!
One such donor asked us a thought-provoking question about gender and money that initially kinda stumped me. In short: do women need different financial advice than men?
I had a knee-jerk reaction to say “no” and leave it at that. (Helpful!) But as I thought about it, I realized there are some significant biological and cultural differences worth discussing. Let’s start by reading the particulars of Patron Mat’s excellent question.
Dear Piggy and Kitty,
Thanks for your amazing insights and unique viewpoints. After getting my financial house in order, friends and acquaintances and coworkers asked me how I did it. It ended up spiraling into a financial coaching side business. I’m three years in and I absolutely love it. I make a difference in real people’s day-to-day lives, and I’m proud to say that the Bitches have been a big influence on me.
Recently, I’ve had more single female clients come to me, ranging from Gen X divorcees handling finances for the first time to wide-eyed Gen Z’ers just about to start their first job. My advice for them is the same as my male clients.
But should it be?
The only gender-specific coaching advice I’ve ever heard is that “women prefer security and men prefer growth,” which always struck me as somewhat sexist? I’m sure that there are women that get hot and bothered by a significant ROI!
What are your best tips for how a male financial coach can fight against—or at least avoid accidentally contributing to—the patriarchal part of the “patriarchal capitalist hellscape?” As their coach, I want to acknowledge these women’s unique experiences and challenges.
I’m assuming, of course, that you haven’t already solved the global gender wage gap, pregnancy penalties, workplace sexism, or other such challenges by the time you get this question. Though I wouldn’t be surprised!– Bitches Get Riches Patreon Donor Mat
What a lovely question from Mat!
Overall, I agree with him that financial planning for women and men should look really, really similar. And I 100% agree that the risk vs. safety thing is a sexist stereotype. But there’s also useful and truthful aspects in that cliché. I’ll get to that.
But there are some legitimate distinctions someone like Mat would want to take into consideration.
I’m going to call out three biological differences and three cultural differences that contribute so how women need different financial advice. The biological differences—at least at this point in history—seem pretty fixed. The cultural differences are significant, but collectively self-imposed. And I hope to see them diminish or vanish in my lifetime.
3 biological reasons women need difference financial advice
Let’s start with biology. Which, coincidentally, is where my straight-A report card streak ended in high school.
The gender binary in personal finance
First, I want to acknowledge the important fact that our society is coming into a much richer definition of gender than it previously held.
Traditional cultural concepts describe gender as a binary, with people being either male or female. If you’re like me, you grew up learning that people with XY chromosomes / baseball caps were men, and people with XX chromosomes / massive triangle skirts were women, and that was that!
Mercifully, that view is evolving quickly. The majority of Americans under 35 now believe that gender exists on a complex spectrum informed by many biological, psychological, and cultural factors. People who defy the gender binary are more visible, supported, and studied than ever before.
Perhaps as a result, 1.2 million Americans now identify as trans, nonbinary, or genderqueer. I suspect that number will continue to climb throughout my lifetime as we develop more nuanced and compassionate ways to talk about sex and gender. BGR is a trans-inclusive personal finance blog. Piggy and I do our best to keep genderqueer readers in mind when we write articles like this:
All that said, we’ll be talking about gender in a binary way on and off throughout this article. I do so not to uphold the gender binary, but rather to critique and deconstruct traditional financial advice (which is hella sexist). Additionally, all the statistics and studies I could find to support my points divide their data between cisgender men and women only. I’ve done my best to keep the context clear in each section.
Biological difference #1: Women tend to live longer
On average, women tend to live about five years longer than men.
Maybe you’re a glowingest-brain overthinker like myself, and said “wait, is that biological, or could it be cultural too?” After all, many of the factors that drag men’s life expectancy down—like substantially higher rates of suicide and occupational injury deaths—seem to stem from patriarchal sexism upon men. (Remember, systemic patriarchy harms everyone!)
However, this does seem to be a fact of mammalian biology. Among over a hundred animal species studied, females lived an average of 18% longer than males. Humans actually have a much smaller gendered life expectancy gap at only 8%.
The advantage seems to correlate to favor animals with repeating chromosome pairs, as the opposite is true with birds, whose males are typically ZZ and outlive females with ZW chromosomes. But it’s complicated! Because additional chromosomes (like XXY humans with Klinefelter Syndrome) have their own health challenges.
… Bet you didn’t start out reading this article thinking you were gonna learn about bird chromosomes! THE MORE YA KNOW, BITCHES!
From a financial perspective, living 8% longer should have a large impact on planning. All other things being equal, women should plan to retire with more money for this reason alone. So that’s one pretty significant reason women need different financial advice than men.
Biological difference #2: Women become disabled more often
Across all age groups, women are more likely to be or become disabled than men. A full 10% of women worldwide are disabled.
If you want to know why, it’s… incredibly complicated. After all, disability is a HUGE umbrella category encompassing thousands of different circumstances. They can be physical, developmental, behavioral, or sensorial challenges present from birth or acquired later in life.
One thing that’s clear is that this is the trade-off to that longer lifespan. Sadly, living longer doesn’t make one automatically healthier. After all, age and disability status correlate. And repeating chromosomes open the door to serious lifelong health challenges like autoimmune disorders that also impact men, but at magnitudes lesser frequency.
And that’s where finances come into play. I think this reality should factor into retirement planning. If I were in Mat’s shoes, I’d make sure to open discussions around topics like long-term disability insurance for women planning their futures.
Biological difference #3: Babies
“What’s the deal with women?! Always shopping and having babies—can ya stop for a second, I’m trying to sleep!”–Me, in full Jerry Seinfeld drag
There are many models of parenting—parents who adopt, trans/nonbinary people who give birth, men who provide primary childcare, and women who don’t reproduce. (Piggy and I are both childfree by choice, so obviously we don’t believe BAYBEEZ are a defining characteristic of l’expérience du féminin.)
So don’t chuck shit at my head! This is obviously a huge generalization. But women are usually the ones birthing and acting as the primary early caregiver to babies.
I expect that many women will want financial plans that incorporate reproduction as a life goal. And friends, it is EXPENSIVE:
- The out-of-pocket cost to give birth to a child in America is $13,000 on average. And yes, that’s with employer-sponsored health insurance!
- A whopping 33% of Americans need fertility treatments like IVF in order to conceive. These treatments are extraordinarily expensive and not something a parent-to-be has necessarily planned/saved for. And it may lead to serious financial and physical complications like multiples. (Piggy’s spouse is a twin—and his parents definitely had to use fertility treatments.)
- Many people don’t realize that alternatives like adoption can be just as expensive. Basically, whatever medical fees you avoid hit you as court costs and legal fees. This site has a great breakdown if you’re interested.
So if I were financially coaching a lady who mentioned wanting kids in the future, I would urge her to start researching early and beef up her emergency fund substantially.
Caregiving as a biological function versus cultural expectation
To me, there’s a big distinction between caregiving as a biological function and caregiving as a cultural expectation.
It makes sense to me that the person who physical creates the child assumes most of the early caregiving.
When my baby nephew was born, my partner and I spent a ton of time helping out his parents. We washed dishes, cooked meals, ran errands, and took turns feeding the baby and rocking him to sleep. But I was struck by the reality that no matter how much we helped, we could never fully relieve his mother. I could give the baby a bottle while my sister took a nap—but she couldn’t sleep for more than two hours without waking to pump.
She kept this untenable schedule for months. If she were a prisoner of war instead of a parent, her schedule would’ve violated the Geneva Conventions. That’s probably why an overwhelming majority of Americans believe that we, as a society, should absorb the cost of paid parental leave. It feels inhuman to expect you to clock into a day job when you’re already doing that incredible labor.
What doesn’t make sense is why that pattern continues past this period of physical interdependency.
… Yeah, I’ll get into that more later.
3 cultural reasons women need difference financial advice
In his question, Mat preemptively acknowledged several cultural realities for women that negatively impact their finances. Pay gaps, leadership gaps, caregiving gaps, yada yada.
All great subjects and well worth talking about. Which is why we talk about them so damn much. If we’re the Rolling Stones, they’re our Satisfaction, Wild Horses, and Paint It Black.
But here’s the thing: no one person alone can fix sexism.
Trust me, I tried!
I ain’t gonna lay things like the gender pay gap at Mat’s feet to singlehandedly solve in his capacity as One Dude. Rather, I want to really narrow the question to something he can actually directly influence. “How do these discriminatory behaviors impact long-term financial planning, and what specific advice could a financial coach consider to help offset them?”
That’s the key to getting a bite-sized portion of actionable advice.
Cultural difference #1: Women’s salaries peak and grow at different times
The first major cultural difference shows up later in life. Women’s salaries grow and peak on different schedules compared to men.
Women reach their peak earnings around 44. After that, they plateau onwards like a looping Wylie Coyote background. Men’s salaries, however, continue to grow. They don’t reach their peak until around 55, and by then, they’re earning about $100K compared to women’s $65K.
That 45-65 age period is crucial to retirement planning. It tends to be the time when children are growing/grown, people buy houses, their student loans are long gone, and they put down roots. I know that many adults don’t fully prioritize their retirement until around this age. Which is okay—our system has a lot of features designed to help late bloomers.
But a 60-year-old man playing catch-up statistically has much more leverage than a 60-year-old woman. And that’s a significant reason why women need different financial advice, especially later in life.
Cultural difference #2: Women have a more vital need for emergency funds
In his letter, Patron Mat mentioned that he’s heard the stereotype that women value financial safety above growth.
Here’s the thing: that is overall true. Statistically, it’s accurate to characterize female investors as generally more financially conservative than male investors.
- Women carry more real estate and cash in their investment portfolios, whereas men carry more volatile investments like stocks and cryptocurrency.
- They make fewer trades overall, preferring to hold instead of wheeling and dealing.
- They resist the urge to check in on their investments as frequently as men.
So clearly there’s a kernel of truth in the “women want safe investments” cliché. Unfortunately, I think it’s because a lot of the decisions women make are primarily motivated by physical safety.
- 99% of intimate partner abuse cases include financial abuse.
- 46% of women who are sexually harassed in their workplace end up switching jobs or fields to get away.
- The leading cause of death for women in their own workplaces is homicide.
I feel passionately that everyone should have an emergency fund that allows them to instantly bounce out of a bad work or life situation. But I think the negative consequences of NOT having such a safety net feel realer and more dangerous to women, and it drives their risk tolerance in understandably different ways.
Cultural difference #3: Women don’t trust themselves as investors
I really didn’t want to make a sweeping generalization about women and their self confidence. And how we all just need to #LeanIn and be a #GirlBoss or whatever.
But folks—the numbers don’t lie. Across many studies, reports, and polls, a crisis of confidence appears again and again and again.
- 75% of women feel confident with everyday financial tasks like balancing a checkbook or managing a budget. But only 19% of them feel prepared to choose long-term investments.
- Women are much more likely to hire financial professionals than men. Those who do also weigh the advice from that professional more heavily.
- 1 in 2 women keeps $20,000 in cash beyond her normal emergency fund. 1 in 5 keeps more than $100,000. IN CASH! IN THIS ECONOMY!?
What causes this crisis? In a culture that historically nurtures timid, dependent, infantilized women, it’s probably easier to ask what doesn’t cause it!
Perhaps it’s unfair to characterize this behavior as lack of confidence in women. Maybe it just seems that way because it’s contrasted with overconfidence in men! After all, 22% of men think their investments will beat the S&P 500. I don’t think that level of delusion should be the gender-neutral goal for everyone.
The reality is this: when women invest, they consistently outperform men. Their portfolios will earn 0.4% to 1% more than men’s. (And if you think that doesn’t sound like much, you obviously haven’t read enough of our rants about the strange magic of compound interest, where half a percentage point can mean thousands and thousands of dollars.)
How financial professionals can do better for women
Let’s bring this back to Mat, our male financial coach and question-asker. How should all of these factors about how women need different financial advice influence him as a financial coach to women?
Personally, I think it’d be a great idea if he explained some of these facts to women upfront to jump-start some reprogramming. I’d consider pushing female clients harder to leave their comfort zones if I truly think their portfolios are too risk-averse. Even something as simple as encouraging more conversations about money with their partners, parents, and colleagues could make a huge positive impact.
And in the interest of not acting as if “male = default,” I would adjust the way I coach men based on the same data. I’d encourage them to learn from women by saving more and diversifying wisely. I’d use data to temper their expectations of going TO THE MOON with every stonk. And I’d probably scold them for monitoring their accounts too actively, like a child with their finger in their nose. Stop picking at it!
Most importantly, if I were in Mat’s shoes, I would
trip cuz they’re gonna be several sizes larger than mine redouble my efforts to always give my clients the best possible advice. Mat has authority in this space in three ways: as a professional, as a man, and as someone who’s seen the other side of financial independence. The data shows that women are going to take his advice to heart. So I would always go the extra mile to be as scrupulously honest, ethical, and communicative as possible. When you speak about how women need different financial advice, they’ll listen. So make it count by being the best, most empowering educator you know how to be.
… Phew. Glad that’s not my job. Too much pressure, man!
Did we leave anything out?
Gotta say, this note kinda made my day when I got it. I really love how eager Mat is to be part of the solution. I’m sure his clients are in good hands!
Readers, do you think I left anything out? Is there anything you want to add for someone like Mat to consider? We have a lot of incredibly cool, supportive male allies soldiering through our hot pink little website, so let’s amplify some quality, actionable ideas for them!
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