by Sherry Hao

Men and women, Mars and Venus—we all see investing and financing differently, but it turns out that a lot of our perceptions and behavior around money can be connected to some of the biological, emotional, and social differences between the sexes.

The topic of men and women and finances is relatively fraught because whenever you talk about gender differences, you often risk running awry and falling into gender stereotypes. But the reality is (as many studies have shown) that there are some distinct differences in the way women and men approach their finances, the way they invest, and how they save.

Here are a few ways in which the differences between the sexes manifest when it comes to finances. 

Women vs. Men and Spending

You’ve probably heard the adage that women see shopping as a sport, and men see it as a targeted mission. While that smacks of stereotypes, there is some element of truth to it. According to 2007 numbers from WomenCertified, a women’s consumer advocacy and retail training organization, women spend more than $4 trillion annually and make up more than 80% of U.S. consumer spending.

A 2007 study by the Wharton School of Business shows that women do, in fact, tend to see shopping as an “activity” in and of itself, while men generally shop with a singular goal in mind. Men tend to go in, get what they need, and leave, while women tend to poke around—and, according to the study, women care more about the store environment and the way they are treated by salespeople. 

The study also shows that men are more oriented toward the utilitarian aspects of the entire experience, while women enjoy and prefer the more personal touch in the retail space. On the flip side, women are more likely to experience issues while shopping, according to the study. They generally identify the main issue as a lack of help when shopping. 

Women generally tend to shop more than men because they are often are buying for others, not just themselves. Sociobiologists argue that women also tend to shop more than men and enjoy it more as a result of many years of social conditioning. Back in the Victorian era, women were largely excluded from economic activity. When times changed, they were thrust onto the consumerism stage, and in the 1920s, savvy business merchants began catering to women and making changes to their spaces to make them more appealing to females. Then ready-to-wear and department stores came on the scene and were marketed as places where women could exercise their right to choose, well before they even had the right to vote. That history has carried forward into the buying trends and differences between males and females, and the social differences continue to evolve.

Women vs. Men and Investing 

It may seem somewhat counterintuitive to operate based only on the stereotypes we all carry around about the differences in financing and investing behavior between men and women. Quite a few studies, however, do in fact show that women tend to invest in the stock market less frequently than men do.

A 2017 study by SoFi, an online bank, shows that while women still earn just $0.81 for every dollar that men earn, they also invest less than men. At the same time, the study shows that women pay back debts faster than men—they pay $200 per month on their loans on average and pay off their debts nearly four months earlier than men do.

Women also tend to invest more in education than they do in the stock market, according to SoFi. According to a 2016 report by the Council of Graduate Schools, women earn almost two thirds of the graduate degrees and half the master’s degrees and doctorates at the schools in the study. 

Instead of investing in the stock market, women tend to hold as much as 71% of their assets in cash, while men hold 60%. Part of that has to do with the fact that men and women manage their money differently, according to Money magazine. According to the panel of experts the magazine assembled back in 2015, that difference largely stems from the fact that women feel less confident about their investments than men do, and women approach investing from a different point of view. According to the panel of experts, women want to be comfortable, while men tend to want to maximize their returns on their investments.

Men also tend to be more sure of themselves when they make an investment, whereas women tend to be a bit more unsure. A 2014 report from Merrill Lynch shows that 55% of women surveyed believe they know less than the average investor about financial markets and investing in general. At the same time, a 2018 study published on Quartz shows that men are more apt to panic when their investments take a downturn than women are. 

While many may chalk this up to biological differences, it turns out that these behaviors might be better explained by societal constructs. Back in 2009, three researchers ran a study on gender differences in competition in matriarchal versus patriarchal societies. The studies found that whichever gender dominates in a culture demonstrates a more competitive nature. That means that men and women are not biologically engineered to be more or less comfortable with risk, have more or less confidence around investing, or be more aggressive with their investments, as Dr. Renee Adams pointed out in her interview with the International Finance Corporation at The World Bank. It’s based on which gender is the dominant one in a society. 

Women vs. Men and Saving

Stereotypes also tell us that women and men save differently. As the saying goes, women like to spend, while men save. Yet today’s research disproves that idea and shows that, in fact, women actually tend to save more than men do as a percentage of their earnings.

A 2019 deep-dive into Fed numbers by personal finance site MagnifyMoney (which is owned by LendingTree) shows that while the pay gap continues to be significant between men and women, women tend to put their money into savings vehicles more than men do. This deep-dive shows that about 23.5% of women have their money in savings accounts and CDs, while men only keep about 15% of their cash in savings and CDs. 

Another 2017 study by Vanguard shows that women are more likely to take part in workplace retirement plans than men are, and they contribute more to their retirement accounts than men do (anywhere between 2 and 8% more than their male counterparts who earn the same amount). It turns out that some researchers believe that this is a result again of culture rather than biology. 

A 2012 study shows that an abundance of men in a culture leads to a corresponding decreased desire, in those men, to save for the future and an increased willingness to take on debt for immediate costs. It’s a similar dominant gender issue as the one highlighted above. 

While none of this is written in stone, and many of these studies took small data sets and extrapolated them to entire populations, suffice it to say that men and women have different approaches to saving for a wide variety of reasons. 

Finding a Happy Medium Between how Men and Women Handle Their Finances

Ultimately, however, there are plenty of lessons to be learned from perceived differences between the way women and men handle their finances, whether they are spending, saving, or investing. 

Regardless of what gender you are or identify with, the core tenets of managing your finances still remain true: Don’t spend more than you earn and save for a rainy day. There are plenty of other, more complex nuances, but managing your financial well-being means being able to know your limits, your comfort level with risk, your confidence in your ability to make sage decisions, and the amount of money you have above and beyond your basic necessities. Those factors all significantly impact what you can and can’t do with your money, and those are not affected by gender.

The other thing to remember is that stereotypes about men and women and the way they handle their money are generalities that do not hold true for every single individual. Money and the way you manage it is intensely personal and varies based on so much more than gender or sex. You can always learn more about managing money from someone who may not approach the topic the same way you do. By remaining open to other financing possibilities, approaches, and perspectives that may differ from your own, regardless of whether these come from or are targeted at either sex, you can get set up for success in the long run. Financial information and management don’t care what sex or gender you are; they are tools to use to improve both your life and the lives of your loved ones. You can learn financial management lessons from both sexes. You just have to be open to those teachings.