The Financial Gender Myth

In many cultures around the world, there is a societal gender bias around money that is so ingrained, many accept it as fact instead of learned behavior. Throughout most of history, the male figurehead in a typical family assumed control of the household finances, made the major financial decisions and managed investments. In the United States today, despite the fact that the number of wealthy women is growing twice as fast as the number of wealthy men — with 35% of all American millionaires being women — societal norms still find many women ceding their financial literacy and power to their male counterparts. According to research from global financial services provider UBS, 85% of women may manage everyday expenses, but only 23% take the lead when it comes to long-term, personal financial planning.

It’s Cultural
Despite younger generations of women debunking gender stereotypes in many other areas of life, many in heterosexual relationships continue to defer to their male partner as their older female relatives have. Not only does this create an uneven power dynamic and imbalanced trust in a relationship, but it can lead to higher stress levels for both the person shouldering the financial burden and the person choosing to be in the dark. Changing life circumstances, such as death or divorce, can prove incredibly challenging for the partner less knowledgeable about their financial picture.

Like athleticism, business prowess is often encouraged more among males than females. The disempowering myths that larger money decisions are “too hard” or “too confusing” for women, that girls aren’t good at math, or that women aren’t trustworthy with money, and the negative idiom of “girl math” continue to propagate at the detriment to the economy, financial institutions and generations of women. 

“Despite a fierce independent streak, my internalized misogyny made me susceptible to sneaky marketing and ineffective financial advice,” said Elyssa Kirkham, founder of personal finance blog Brave Saver. “It even led to choices that forced me to rely on others financially. I followed my parents’ advice against getting a credit card in college, for example. But as a result, I didn’t build credit, so when my husband and I got our first apartment together, I had to lean on his good credit history. My name was left off the lease altogether.”

Many parents unknowingly pass on the financial frailty myth to their daughters and teach them to defer to their fathers, male relatives or future male partners when making big financial decisions. As a result, many women don’t prioritize learning about finance, assuming someone else will take care of it. This perceived helplessness around finance snowballs into gender inequities in the workforce and contributes to the gender pay gap. 

Investing

Nancy Tengler, CEO and chief investment officer of Laffler Tengler Investments in Scottsdale, AZ, and a portfolio manager for more than 40 years, noticed that women of all backgrounds and socioeconomic situations recoil when they learn what she does for a living. “Their common response was usually something like, ‘Oh, my husband handles that,’” she said. The reaction inspired Tengler to write her book, The Women’s Guide to Successful Investing.

Historically, women have been less likely to invest than men, and over time, this has serious financial repercussions. According to a 2024 report by Prudential, the median retirement savings is $50,000 for women compared to $157,000 for men. By educating women of all generations on their rights and ability to take the lead in their own investments and savings, those numbers can change.

Studies also show that while women may invest less often than men, often due to a lack of emphasis on women’s finance education, when they get started investing, they save more and get better returns and results than men. In addition, despite the large percentage of young women who defer to the males in their lives for financial advice, many others are getting started with investing much earlier in life than their mothers did.

In 2022, Fidelity found that women aged 18 to 35 years old first opened a brokerage account at 21 on average and a retirement account at 20. Women 36 and older first opened a brokerage account at age 30 on average and a retirement account at 27. Because of compound interest and investors enjoying larger returns the longer they invest, those extra years of investing make a huge difference.

Social Security

As parents age and potentially need financial help or caregiving, the responsibility is more often taken on by daughters than sons. This life change may require women to pause or quit work altogether, and this negatively impacts their social security earnings history which is based on the highest 35 years of earnings history.  

“This has impacted baby boomers significantly,” said Birdneck Point resident Colby Murphy who is a certified financial planner (CFP®) and chartered retirement planning counselor (CRPC®) with Truist Bank. “Women also tend to live longer, so they will often rely on their spouse’s higher benefit if they die. It’s incredibly important to plan, because when this is the case, too many people turn their benefit on early, which hurts the surviving spouse in the long run.” 

For example, if a surviving spouse waited until age 70 to begin accepting benefits, they would grow the benefit by a current government-backed and guaranteed 8% per year up until age 70. “It’s a strategy I frequently see not taken advantage of to the detriment of the surviving spouse,” said Murphy. 

A Seat at the Table

According to the November 2024 article “Why Are There So Few Women in the Financial Services Industry?” by Inga Timmerman and Laura Mattia, the number of CFPs has remained at 20-25% for over a decade and only 16% of advisors across all channels are female. “Furthermore, as of September 2023, only 1.4% of assets under management in the United States were managed by women and people of color (Chiu 2023),” wrote Timmerman and Mattia. “In contrast, female clients control more than $5 trillion of investable assets (Krawcheck 2017), and this number is expected to increase as women outlive men. While women have wealth and increasingly accumulate more wealth, much of that wealth is managed by men.” 

As it witnesses women controlling more and more wealth, the financial services industry is beginning to take notice that financial literacy and autonomy is good for business and clients. Many financial services groups are striving to recruit more female advisors and provide more resources to encourage financial involvement. 

Permission to be Impolite

Women are often fed the view in our culture that it is crass or bad manners to discuss money issues. Furthermore, women often feel pressured by society to spend a great deal of money on outward appearance maintenance to be accepted by the same society, and yet women are often shamed for spending money on themselves, especially on items deemed “feminine.”

The limiting beliefs about earning a higher salary or career potential as women are ingrained early in life and are perpetuated as they age. However, while uncertainty around money can undermine one’s confidence initially, women can begin to trust their own financial judgement, attain knowledge through a vast network of online resources, podcasts, literature and financial advisors, and become the financial authorities of their own lives.

“I wish high schools would incorporate banking, borrowing/credit, investing and personal finance in the classroom,” said Murphy. “I believe that it would help normalize and de-stigmatize personal finance and put everyone on an equal well-informed playing field.” Truist Bank has resources available for just this kind of education for schools or community organizations. Truist Life, Money, and Choices™ is a new financial education program tailored specifically for high school and college students.

With more education comes more confidence and self-assuredness; knowledge is power. The best way to push back against a patriarchal system is to make your own money to develop the self-sufficiency to make your own financial decisions. Forbes magazine wrote, “Studies estimate that by 2030, women will control as much as two-thirds of the nation’s wealth.” While there are so many areas of a woman’s life where, by law or physical limitation, she has little to no power, financial literacy isn’t one of them. It is time for more women to take a seat at the table and pull a chair out for their daughters. This gives generational wealth a whole new meaning.