Choosing to challenge the tropes about women and money
March 02, 2021, 7:00 CET
As women obtain more equality and equity in their working lives, you’d think that social conditioning and the way women are spoken to about money would have also changed.
But sadly, the fallacies that are told about women and to women – as Ellevest CEO Sallie Krawcheck likes to point out – can have a major impact on the way women move through the world.
"Women spend money frivolously"
For a lot of women, the first introduction to financial tips are from fashion and lifestyle magazines. Girls and women are taught from a young age that finance is hard, but looking good is easy (you just need to spend a little money). To help women look good easily, there are the "how to budget for the spa weekend", a whole section called – "Splurge vs Steal" – aimed at helping young women find that expensive look for less, and "tips" that are more condescending than actually helpful. The articles that do appear around money normally focus on the shame and guilt perpetuated by not living up to what society has told women they need to be. Behavioral marketing and economics are hard at work here.
And as if behavioral marketing wasn't bad enough, women must also deal with the Pink tax. On average, women will spend $1,350 more per year on items that are either necessary (feminine hygiene products) or just cost more. In fact , by the time a, "woman turns 30, she's been robbed of $40,562 just for being a woman." Read more about the pink tax
"Women are bad at math and finance in general"
The frivolous spending trope is only one part of it. From a young age, many women are told that they are bad at math, finance or numeracy in general. Studies have shown that the better a person is at basic math in combination with little to no financial or math anxiety, the more likely they are to have a successful financial future.
For young girls, math anxiety can start at an early age when they hear it in the classroom. Here a teacher's biases can translate into feelings of not being good enough, which can have an impact on a girl's chances of moving to more advanced math. But it isn't just the classroom; at home, where boys are taught more about money from their fathers and paid, on average, twice as much as girls for doing chores per week, young girls are taught about budgeting and the day-to-day household spending and not long-term savings.
"Women are too emotional to be in charge of investing"
The you're-too-emotional trope is certainly a phrase that is not new for many women. In the past, it was used as an argument to deter women from obtaining the right to vote and hold public office and has been used as a reason as to why women shouldn't hold positions in the C-suite.
But it is just that, a trope.
A 2018 study from Warwick Business School, analyzed, “2800 investors and found that not only did female investors outperform the FTSE 100 over [a three-year period], but also outperformed their male counterparts by 1.8%.” The reason the women’s performance was better? They were less likely to make speculative bets and held a longer-term perspective when it came to portfolio management. But the 2018 study wasn’t just a fluke. In 2020, female-led hedge funds in the U.S. outperformed their male counterparts in the first four months of 2020.
Choosing to challenge these fallacies is instrumental in changing the systems and ideas that perpetuate theses stereotypes. Society holds one aspect of power. But women also hold great power in how they engage with these tropes.
So how are women in the financial services industry pushing back? Next week, we're sharing three examples of women #ChoosetoChallenge.