3 Ways Women Approach Money Differently and 3 Financial Obstacles They Face

There are many differences between men and women, particularly when it comes to physical, behavioral, and emotional characteristics. 

Men are typically taller, stronger, and have more muscle mass than women, while women are typically more nurturing and empathetic. Men tend to categorize the world by tasks and keep their emotions under wrap, while women tend to categorize life by relationships and openly share their feelings. 

Each gender has its own strengths and weaknesses. It’s important to understand how these differences can lead men and women to approach certain topics, like personal finance, in unique ways. As women, this allows us to capitalize on our strengths and natural skills.

Personal finance for women is one of our favorite topics to talk about, so let’s dive into some areas where women approach money differently and three financial obstacles they must overcome!

3 Ways Women Approach Money Differently

Women are often the ones who manage their household’s day-to-day finances. Coupled with the fact that women typically live longer than men, it’s imperative we understand how women approach personal finances. 

Because of social norms and gender roles, the way men and women approach investing, saving, financial education, and goals can greatly differ. 

Now, of course these are all generalizations and there will always be individuals who don’t fit the ‘typical’ behaviors of their gender, but generally, here are three significant ways women approach money differently from their male counterparts:

1. Women focus on long-term financial goals

2. Women talk more about money

3. Women invest more conservatively

1. Women Focus on Long-Term Goals

When it comes to financial priorities, women often take a goal-oriented approach. Women’s top financial priorities tend to be security and stability, often focusing on long-term goals. These priorities can be seen in the way women tackle many different aspects of their financial lives. 

For example, women tend to prioritize having a fully-funded emergency account because this provides a safety net should there be an unexpected job loss or health crisis. Women are also more likely to participate in their employer’s retirement plan and save for retirement more aggressively than their male counterparts. 

Because debt can be a burden on financial stability, women often prioritize paying off their debt in order to feel more secure. Similarly, women are also more likely to be diligent budgeters, ensuring enough money is being saved. 

Women tackle their savings, spending habits, investment strategies, and debt repayments with their long-term goals in mind. 

2. Women Talk More about Money

Women are naturally more relationship-focused and collaborative in their communication style. They prioritize understanding and empathy, often making money conversations easier. 

Women are more likely than men to ask for advice and talk about money with others. Seeking this support from others can drastically help overcome underlying factors that many women have surrounding their finances such as fear, avoidance, and low confidence. Not every woman has these factors at play, it depends on how she was raised and her level of financial literacy.

Collaborating with others, be it a financial coach or professional organizations focused on networking and personal finance for women, can allow women to share their experiences, concerns, and dreams in order to achieve their financial goals. 

3. Women Invest More Conservatively

Since women prioritize their long-term goals, it’s not surprising that they approach investing with the future in mind. Women tend to play the long game with their investments. They trade and sell less often, take a more conservative approach, diversify, and hold their investments longer. 

Women are by no means risk-averse, they simply temper risk by investing in what they know, which typically leads them to avoid significant losses. Women are also less likely to invest in quick, higher-risk opportunities. 

A woman’s natural tendency to plan, research, and stay committed to her financial decisions can help her investments grow substantially.  

3 Personal Finance Hurdles Women Face

Men and women often need to approach finances differently because both genders face unique financial hurdles. Three of the personal finance hurdles women face include: 

1. A longer life expectancy

2. Higher expenses 

3. Caregiving responsibilities

1. A Longer Life Expectancy

According to a study conducted in 2020, men live to an average age of 76, but women live to an average age of 81. Women need larger nest eggs to accommodate the additional years of life, including the major expenses of long-term care and healthcare. 

These additional years can carry a significant financial burden, especially if a woman was not able to save as much money for retirement due to interruptions in her working years (more on that subject below). 

Long-term care insurance and annuities also carry higher price tags for women. Oftentimes, women will have to pay more money for a long -term care policy that carries the same coverage as a man’s. In addition, widowhood can cause emotional and financial strain, especially if the husband was the primary breadwinner. 

When considering long-term goals, women have to consider the costs associated with living longer lives and plan appropriately. 

2. Higher Expenses 

Healthcare costs can greatly differ between the two genders. Women spend approximately 35% . A major portion of these expenses can be directly related to the cost of pregnancy and childbirth. However, pregnancies aside, women still need to pay for gynecological care, birth control, and feminine hygiene products. 

Personal care products and services like haircuts also typically cost more for women. The “pink tax” has become an increasingly popular phrase. It refers to women’s products costing more (approximately 7%) than similar products marketed for men. 

3. Caregiving Responsibilities 

In addition to living longer than men and having higher expenses, women often have disruptions in their working years. Caring for young children or elderly family members can force women to reduce their hours or leave the workforce entirely. This can lead to women missing out on valuable promotions, decreasing their earning potential, and lessening their retirement contributions. 

Fortunately, many of the ways women approach personal finance greatly benefit them. By having a long-term focus, a team-oriented approach, and investing conservatively and consistently, women can overcome the many hurdles their gender faces. 

Collaborate with Financial Fitness Coaching 

At Financial Fitness Coaching, we love helping women develop strong financial habits to reach their most ambitious money goals. Through collaboration, education, and planning, we can help women overcome financial obstacles and craft a financial plan that suits their unique desires and priorities. To see how we can help you email us at info@financialfitnesscoaching or simply schedule a free 20-minute Discovery Call on our calendar.