Women have made great strides in making smart money decisions for themselves and their families, and in many ways surpass men in making financially wise decisions. (See “4 credit lessons men can learn from women.”)
But research shows that there are some ways in which women could benefit by acting more like men when it comes to how they manage their credit lives.
For instance, a March 2016 survey by student loan provider Sallie Mae entitled, “Majoring in Money: How American College Students Manage Their Finances,” found that male college students were more likely than female college students to view their credit report (55 percent of men versus 44 percent of women).
Take a look at some of the other ways in which gents have the upper hand, and why sometimes “thinking like a man” can be the right money move.
1. Men think big picture.
“For males, in general, it’s just instinctual for them to want to go out and conquer and acquire, whereas women are more about, ’Let’s plan and manage what we have,” says Brittney Castro, CEO of Finally Wise Women, a California-based firm.
So, while females tend to take on the role of handling the monthly budget, they may not be as involved in longer-term decisions or as focused on taking care of their individual credit file or retirement accounts. According to TD Bank’s 2015 Love and Money survey, men are almost twice as likely as women to say that they are the financial decision-makers (26 percent of men versus 14 percent of women); the remainder of those surveyed make decisions as a couple.
Getting too caught up in the day-to-day and not thinking ahead can lead to trouble in the future, says Kelley Long, a member of the AICPA’s National CPA Financial Literacy Commission. “The folly is when one person sticks their head in the sand about money and thinks they don’t have to worry because they are not the earning spouse,” she says. Doing so puts that woman at risk if the partner leaves, dies or loses a job. “How to use credit responsibly is everybody’s issue, even if you’re not the one worried about paying the bill at the moment.”
Being financially responsible, knowledgeable and in control of your money is an attractive trait in both sexes.
|\u2014 Kelley Long |
AICPA National CPA Financial Literacy Commission
And women shouldn’t put off taking financial risks, says Castro. “Women are becoming breadwinners, managing finances and are independent, but many are still afraid of investing,” she says. Educating yourself and finding a professional whom you trust to get the right plan set up for your long-term wealth is a smart strategy regardless of your gender.
2. Men are less impulsive.
The Sallie Mae research also found that more men pay their credit card balance in full each month (68 percent versus 57 percent of women).
“What this indicates is that guys are using credit more as a tool,” says Joseph Roseman, managing partner of O’Dell, Winkfield, Roseman & Shipp, a wealth management firm in Charlotte, North Carolina. “They’re staying within their means and using credit as a record-keeping device.” On the flip side, the implication is that young women are more likely to make impulse purchases beyond their budgets, hence why they may revolve balances.
Also noteworthy is that women have 23.5 percent more open credit cards, according to March 2016 research by Experian. While this isn’t negative by itself, credit scores do drop temporarily when new credit is opened, and juggling multiple accounts could spell disaster for people who aren’t disciplined about controlling their spending.
Cathie Ericson of Portland, Oregon, says she used to think nothing of opening store credit cards to get those one-time discount offers. Then her husband, who is a mortgage broker and reviews credit reports regularly, pointed out the potential pitfalls. “Just recently, I was at Old Navy and the cashier offered me 20 percent off that night, plus 10 percent off all month. It was a little tempting, but I remembered my husband’s words of wisdom,” she says.
If you are relying too much on credit or carrying balances, you should try living on cash for at least a month and track your spending habits, says Roseman. “It’s so much harder to pull cash out of your pocket than it is to swipe a card,” he says. Learning to spend within a budget and be less impulsive is a skill that can serve anyone well throughout life.
3. Guys are more confident and assertive.
In the Sallie Mae survey, nearly one-third of men classified their money management skills as excellent (29 percent), while fewer than one-fifth of women (19 percent) said the same. Similarly, Fidelity’s Money Fit Women study found that only 47 percent of women say they would be confident discussing money and investing with a financial professional.
Why the self-doubt? “Many times my conversations with young women start with, \u2018Well, my dad told me,’” says Long. In other words, feminism aside, it’s still more culturally acceptable for men to be the more economically focused sex, while women are taught to be more nurturing. “Even in a modern household, that’s how we’re wired,” says Long.
Women have to get past the notion that thinking about money or even pulling out a calculator to crunch some numbers is a guy thing, says Long. “Being financially responsible, knowledgeable and in control of your money is an attractive trait in both sexes.”
Feeling confident about your money knowledge is essential, says Long. That means you may need to read a book, take a class or ask questions to hone your financial skills.
4. Men are less emotional about their financial situation.
Women are more likely to tie their net worth to their self-worth, says Castro. “Women have guilt and shame when they’re in debt. They feel bad about it, and let it affect them on an emotional level,” she says.
An April 2016 CreditCards.com poll found more women lose sleep over money worries than men. More than 2 in 3 women (68 percent) said they go sleepless over money issues at least occasionally; for men, it was 56 percent.
Look at your finances from a more rational standpoint & ndash; which is stereotypically the way a male would – rather than beat yourself up for shortcomings or failures, says Castro. “If you’re in debt, don’t be afraid to dive in and know your numbers, because that’s how you’re going to pay it off in the most effective way,” she says.
Before you can do that successfully, though, Castro says you need to get past your emotions. Share how you’re feeling with somebody, whether it’s a girlfriend, a partner or a financial counselor. “Then be brave enough to say, \u2018I have debt, and here’s how I’m going to deal with it.’ You are powerful enough.”
Battle of the sexes: not a battle at all
Despite all the research and even our DNA-driven predispositions, experts agree that smart money management knows no gender. What is certain is that individuals and couples can benefit from more financial education and communication. As Castro says, “Money affects us all. Those who talk about it and do the work are the ones who are financially successful.”