Are men better at managing money than women?

[highway61d]

My wife and I both manage our money. My wife keeps track of when bills are due and pays them and I manage our quicken account and budgets. We just started quicken recently with all the holiday spending, anyone else use quicken? I have found that quicken is very time intensive to start but it keep on getting easier and easier to use and it is really helping us track our spending!

[martinh]

Originally Posted by Will

BTW, I also wanted to bring these facts to your attention:

• 7 out of 10 Americans thought their mothers were good financial role models (link).
• Mutual funds run by women are just as successful as mutual funds run by men. (link).
  
• Some studies show that women are even better at running hedge funds than men are (link).

All interesting statistical anecdotes. However, they don't really state whether women or men are better at managing money. A complete econometric study of M vs W as money managers could be conducted, and would be very expensive and time consuming. In the interim we have some correlative evidence from CSU economist Dr. Nancy Jianakoplos that women are more risk adverse than men in general, but female and male executives exhibit the same amount of risk in dealing with stock options. Found here:

Department of Economics Faculty Profile

Thus, cetris paribus, men are probably poorer money managers due to their increased level of investment risk.

[Will]

That's very interesting Martin.

If women are more risk adverse than men, what do you think is the cause? Is it biological (a conservative biological reproductive strategy) or environmental (women have historically been financially dependent on men and therefore might be more hesitant to take financial chances).

[Julie Rains]

I'll speak for myself and not all women but I desire security more than the others in my house (all male, except for the dog). But how that drive for security plays out in making financial decisions can vary greatly: one may consider it a nice home with a well-paid husband; another may consider it a stock portfolio.

[Citoahc]

In my case I know a lot more about money, saving and investing then my wife does. On the other hand my Wife usually has more money than I do because she is better at controlling what she spends.

In general I think that men are more likely to take advantage of the system but in the long run that doesn't make much of a difference. For example while I know I can use a credit card and effectively spend money from my next paycheck as long as I pay off the card completely by the due date she is more likely to just wait on the purchase. We both spend the same amount just in slightly different ways at slightly different times.

[majaed]

I think the strongest factors in determining this are personality, education, and upbringing...not gender. I find the that the biggest differences in money-managing abilities exist between people with different upbringings, different education levels, and/or different personalities. Once you hold those things constant, men and women show very similar aptitudes and tendencies in managing their money.

[ricksfrancis]

Originally Posted by Will

Is there something about men that makes us better money managers? Why are women associated with so many negative financial stereotypes?

• Gold diggers
• Daddy's little girl
• Impulse shoppers
• Penny-pinching housewives

Why do we have these stereotypes? Are they a kind of self-fulfilling prophecy?

In September, Nina Smith of Queercents noticed that women financial bloggers are not getting their due:



Does this discrepancy highlight some kind of inherent bias the blogosphere has against financial advice provided by women? Or are there truly differences between how men and women manage money?

I don't think that men are inherently better at managing money, I've read studies that say that women are on the average better, but I have encountered the full gamut of abilities with both genders.

As for stereotypes, I don't think a housewife that pinches pennies is really a negative financial stereotype- if she pinches the dollars too then that's half of the financial battle!

Why do any stereotypes exist? I think it is because there are enough example cases that fit well enough to perpetuate the stereotypes. Why are there so many negative ones? Are most people wise or foolish with their money?

I would say that it's generally a bad idea to trust any stereotype very much. It would be great if we could always reliably apply a simple pattern to understand the complexities of reality but unfortunately I don't think life is that simple. Furthermore I don't think that just hearing these stereotypes funnels one into becoming one of the stereotypes. I submit that values and behaviors learned from parents would be a much greater factor. Say that mom loves to shop and takes her daughter out shopping as a way to bond with her. This is a conceivable way that "Impulsive shopper" could pass from one generation to another. However, again it's an oversimplification- what if the daughter hates the time spent shopping with her mother and why couldn't a son love shopping?

I would advise spending more energy focusing on real people and their actual skills and talents. If you know your wife is better at managing finances than you are than let her do it and try to learn from her. If you are better than you do it and teach her.

-Rick Francis

[MillionaireMommyND]

(From Davoscat) Millionaire Mommy is probably the richest of all personal finance bloggers. I don't think she made her living off selling oatmeal cookies and babysitting.

Originally Posted by katlady

Wooo love her. She's such a great role model.

I wonder if women bloggers have to try a lot harder to get the respect of their male colleagues?

Thank you for your kind compliments!

Unfortunately, I'd have to say that I DO have to try much harder to gain the same level of respect that men get. I deal with male-chauvinism on a regular basis via my blog. For instance, I've had someone tell me that what I write and what I've accomplished is too good to be true "for a mere mommy mortal". I've been told to "go back to baking cookies" and be subservient to my husband. Some people doubt whatever I say because I'm a woman... therefore my success must be a lie. Or that my success and wealth must be a product of stupid luck.

I suppose it could be low self-esteem that makes it difficult for them to deal with a strong, intelligent woman. So they try to push me down to their level. Sorry... but that tactic will NEVER work on me!

My greatest hope is that I can make a dent in some people's perception about women. There is no greater honor for me than to be considered as a positive female role model.

[arcadian]

wooo a real live celebrity.

your blog is an inspiration! i especially enjoyed this part

My income came from owning simple, small businesses that I managed from our home-- often while wearing my pajamas.

a millionaire in my jammies. that is my fantasy. i do have a quick question if it isn't too personal

Meanwhile, my husband served as a company-employed plumber working for hourly wages, earning $30,000 to $35,000 a year.

i've always thought plumbers made a lot more than that. or is that just a myth?

[MillionaireMommyND]

Originally Posted by arcadian

wooo a real live celebrity.

your blog is an inspiration! i especially enjoyed this part

a millionaire in my jammies. that is my fantasy. i do have a quick question if it isn't too personal

i've always thought plumbers made a lot more than that. or is that just a myth?

I just checked with my hubby. He said he started, at age 18, making $12,000 annually. As he gained more experience, his pay as an employee topped out at $35,000 annually.

But remember, he's an old fart (ha!) so you'd need to figure in the effects of inflation to determine his pay in today's dollars. Hourly plumbers today, working a job for their boss, make about $35-$55k annually. Earned income can rise significantly if the plumber is self-employed, though, like my husband became in his thirties. That's when we started making $100-125k annually from our plumbing biz.

We charge our customers $65 to $85 an hour for plumbing, plus a mark-up on materials (fixtures and supplies). After paying the costs associated with running our biz, we keep about 50-60% of the total revenue. Note: We keep more revenue than most other businesses because we keep our expenses down by using an in-home office, staying small, and generating new customers via word-of-mouth referrals, therefore avoiding advertising expenses.

Rates and salaries vary greatly, of course, depending on your location. In some locations, plumbing companies charge $45/hr; others $200/hr (like San Francisco, ski resort towns, etc) where cost of doing business is so much higher.