Are Men and Women Equal?
Not when it comes to how much they say they know about personal finance.
There’s a significant gender gap between men and women when it comes to financial literacy — particularly in investing and budgeting, according to a 2011 study.
Here are highlights of the online survey conducted by Financial Finesse, a financial-education firm in California:
- While 84% of men say they have a good general knowledge of bonds, stocks and mutual funds, only 64% of women claim the same level of knowledge.
- 42% of men are confident about their investment allocations, compared to 25% of women.
- 80% of men say they have a good handle on their cash flow each month, compared to 63% of women.
- 30% of men surveyed report uneasiness about debt, while 46% of women are uncomfortable with the amount of non-mortgage debt they carry.
- 65% of men pay credit-card bills in full each month, compared to 49% of women.
-The smallest gap was in retirement preparedness, where both genders appear woefully unprepared. Only 19% of men and 12% of women said they are confident that they can replace 80% of their income in retirement.
-The two sexes are participating equally in their employers’ 401(k)s, or other retirement-savings plans, with 92% of women and 91% of men saving; women, though, are far more conservative in their investment choices.
Are men indeed more financially literate? Or is their confidence misplaced? No one knows for sure. Fortunately, there are signs that the gender gap in financial literacy is narrowing. Women are now twice as likely to seek financial education and more likely to make changes based on it. When educated about finances, women tend to outperform men in their investing because they tend to make fewer and more prudent trades than men (who tend to be more cavalier about trading), according to the study.
Regardless of your gender — because this advice applies to both sexes — if you haven’t taken a strong interest in financial planning, I strongly encourage you to talk with an independent, objective, fee-based financial advisor who can show you what you need to do to achieve a better financial future. You’ll be glad you did.