By Emily Montague, TFW Managing Editor

We’ve all heard about the (often misunderstood) wage gap between men and women. We’ve heard of pay discrimination, gendered financial abuse, and many other serious issues that impact women’s financial health and ability to thrive.

Not all of the money-related issues women face are quite so glaring, however. Some of the more pervasive problems can be seen in our society’s stereotypes about women, money, and financial sense.

What are these stereotypes? How did they form, and why do they persist? Are they 100% false, or is there some truth to them? Today we’re going to explore these questions and get some answers

Women & Money Stereotype: Women Spend More Money Than Men Overall

This myth is easy to bust, since it runs completely counter to the statistical reality. On average, single men spend about $2000 more per year than single women. This difference is slight but present across all demographics (as of this writing).

If this is the case, then where did the stereotype come from? Well, a lot of it has to do with popular media. Movies have long depicted female “shopaholics” as main or major characters. The archetypal “rich girl” or heiress is also ubiquitous in Hollywood, and jet-setting celebrities such as the Kardashian sisters or Paris Hilton have only reinforced the image in our popular imagination.

The truth of the matter is more complicated than simple sums of money, too. A lot of the differences in spending between men and women come down to what we spend our money on. In this area there truly are gender-based patterns, but the difference in overall spending is still negligible.

So, it’s safe to say that men and women are more or less equal when it comes to opening their wallets and spending their cash.

Women & Money Stereotype: Women Are More Impulsive About Their Purchases Than Men Are

It’s difficult to define “impulsive” spending, since the term itself is fairly subjective. Studies on this topic therefore tend to rely on self-reporting rather than objective metrics.

With that in mind, studies tend to show two major trends when it comes to gender and impulse spending:

Women tend to make more impulse purchases than men,
Men tend to spend more on impulse purchases than women do.

Again, this comes down to differences in what we buy rather than overall spending patterns. Women tend to make smaller but more frequent spur-of-the-moment purchases, especially when it comes to online shopping. They are more likely add one or two smaller items to a larger, more planned-out purchase when filling their online shopping cart.

Men, on the other hand, are apparently more likely to see a “big purchase” and act on impulse to purchase it. When they have the disposable income (or line of credit) available, they’re more likely to spend it on something big, like a new TV, gaming console, or car, for example.

Electronics make up the bulk of men’s impulse purchases, and this explains the greater amount of money spent by males in this category. Women’s impulse purchases tend to be things like clothes, home goods, or services. These things tend to be less costly than electronics or automotive parts. So, even if females make these purchases more frequently, the total amount spent still adds up to less than it does for the average male.

Could you argue that women are more likely to spend on impulse? Possibly. The frequency of self-reported impulse buys would seem to be in your favor. But you should also consider other factors, such as potential differences in the way men and women are likely define an “impulse” purchase versus a non-impulsive one. The total spend amount also matters, so that’s also something to keep in mind.

Women & Money Stereotype: Women Are Less Likely To Invest Their Money Than Men Are

This is another complicated stereotype. Like the issue of impulse spending, it’s true on a surface level – but there’s a lot of nuance hiding beneath that truth.

Research tends to agree on two main points when it comes to women and investing:

Overall, women invest less in the stock market than men (48% of women vs. 66% of men),
When they do invest, women make proportionately more from those investments than men do (on average).

Many articles about this phenomenon simplify things by saying that women simply “invest better” than their male counterparts, but that’s a blanket statement and can be unnecessarily adversarial. Some researchers have summarized their conclusions in phrases like “women invest more cautiously” or “are more selective” about their investments.

The law of averages holds sway here, too. It may well be that men experience more “big wins” with their investments than women do…but big losses may balance those out. And while women may make less in a given quarter than their male counterparts, they seem to come out on top when we use longer-term metrics and track their performance over years or decades.

The fact that women on average earn 82% of what men do may also play a significant role in the way that women invest their money. And while the pay and wealth gaps are misunderstood, they are certainly statistically validated – and it is therefore logical to draw conclusions from these discrepancies.

One such conclusion is that women have less capital overall, and are therefore less likely to place their existing funds into higher-risk investments…or to invest in the traditional sense at all. There are also pervasive gaps in the way women are educated about investing, and many women end up underestimating their own financial acumen by a significant margin.

Whatever the reasons behind the trend are, the basic conclusion remains the same. Women are less likely to make traditional investments (though the COVID pandemic period has seen some significant changes in this regard), but those that do invest are likely to outperform their male peers.

What Can We Learn? The World Of Finance Is Changing, And Money Stereotypes Usually Hide A Lot Of Complex Truths

People like to simplify. Stereotypes are unfortunately one of the many ways we achieve this in both an individual and a societal context.

Ironically, many gendered stereotypes are also extremely complex. Sexism plays a big role, of course, but that isn’t always the sole reason for our assumptions about men, women, and their relationships with money. Sometimes there’s a grain of truth to our money and gender stereotypes; but it’s equally true that those grains cover up a great deal of other, more relevant truths that give us a more accurate picture of the world.

At the end of the day, men and women aren’t so different. In the modern age we are less different than ever, especially when it comes to our finances. Women and men are business owners, investors, accountants, influencers, and more. Both genders also struggle with money, form bad habits along with the good, and face financial challenges.

The trends we’ve explored here are certainly interesting, and hopefully this article has opened your eyes to a few things you didn’t know before. Just remember: things are changing at a faster pace than ever before. We like to think that those changes are taking us all somewhere good.

A big thank you to our partners at FJR for supporting this piece and others like it! Stay tuned for more articles and interviews on women, money, and gendered finance.

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Spent Myths: Confronting Stereotypes About Women & Money