Published July 12, 2023 • 4 Min Read
Gender, or more precisely how a person is socialized, plays a significant role in shaping money-related attitudes and behaviours which in turn guide how you approach personal finance. Put simply, boys and girls receive different money messages from culture, family, and community starting in childhood and following them through their entire lives. It’s useful to understand these beliefs and attitudes so you can be better equipped to make informed financial decisions.
A look at the research
Research on the issue of how gender affects a person’s attitudes about money goes back decades, with modern scientists mostly in agreement that there is a measurable link. This difference has been described as gendered “money cultures” or “money types”1 and the consensus is that how you were brought up — whether you were socialized as a girl or a boy—influences your beliefs and behaviours with money.
Does gender influence your relationship with money?
Children receive all kinds of messages from family, their community, and their culture about how they should behave, what they deserve, and what they can contribute. These messages can be subtle or direct, but together they help form your worldview. This includes how you think about money.
Consider this example: A 10 year-old boy gets his first job, mowing the lawn, for which he receives $20. He learns that he is capable of such tasks and that his efforts are worth money. He now has the freedom to save or spend his money as he wishes. His counterpart, a 10 year-old girl, looks after the younger children in her house, something she’s expected to do for free. She learns nothing about earning (or spending or saving) money, and that she’s expected to work for free.
These messages will follow these kids throughout their lives, for better and for worse. In addition to experiencing financial independence and status, the boy may learn that he’s supposed to be the only responsible earner in his family, a message that can lead to anxiety, hoarding, and workaholism. The girl will likely experience the gender pay gap first-hand, a circumstance that spurs anger and anxiety.
Not every person’s story is the same, but when you examine the messages you’re received about money, you can begin to understand how they contribute to a gendered worldview — including how you view finances.
Money and gender
To understand gendered money types — that is, attitudes and beliefs about money — it’s useful to acknowledge the ways gender may affect your finances.
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Socioeconomic status. Those with inherited access to resources may have different opportunities from those who don’t. For example, if your family had the money to be able to send you to summer camp, you could gain certain skills and experiences, as well as access to relationships with other children and their families.
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Gender pay gap. This refers to the difference between the average wages of a working man and a working woman. In Canada, there’s a pay gap of around 11 per cent,2 which increases when considering other factors, like race. Over a lifetime, losses compound and affect a women’s financial standing, savings, opportunities, and long-term wealth accumulation.
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Bias. Women may face conscious and unconscious bias across sectors like business and finance, making it much more difficult to participate fully. For example, right now in Canada, only 17 per cent of small- and medium-sized businesses are women-owned.3 Bias can take many different forms, but as an example, women may have difficulty obtaining financing or may receive smaller loans than their male counterparts.4
Gendered money types
Different researchers express their findings differently, but still, some main trends emerge.
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Money priorities. Generally speaking, women and men prioritize differently when it comes to how they spend their money. Women place a lot of importance on saving for the future and on education and healthcare, while men focus more on short-term gains or investment opportunities.
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Investment profiles. Men tend to have a higher tolerance for risk when it comes to investments, choosing high-risk assets like stocks. Women may be more risk-averse, seeking out lower-risk and lower-reward investments.
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Financial confidence. Women are generally less confident than men regarding their financial literacy.
You can see how familial and social attitudes about gender can interact with real-life circumstances.
Financial literacy is extremely important for people of all genders. Whatever your money goals, you’ll get there easier if you can identify your own beliefs and attitudes about money.
Sources:
1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4543416/#CR33
2. https://www150.statcan.gc.ca/n1/pub/14-28-0001/2020001/article/00003-eng.htm
3. https://ised-isde.canada.ca/site/women-entrepreneurship-strategy/en
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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