In the world of finance, women have long been depicted as indecisive investors, insecure about their financial knowledge and the decisions they make with money. But this is a myth — women don’t lack financial confidence. Here’s why.
Why the Myth Exists
We live in a culture that applauds people who speak and act authoritatively, don’t hesitate or mince words, and make decisions quickly (for better or worse).
While there are certainly women who embody these characteristics, there are many more who tend to think things through before they contribute to a conversation or prefer to gather more information before making a decision. This quality can be easily misinterpreted as a mark of indecisiveness and insecurity when, in fact, the woman who embodies it is simply taking time to reach a well-informed decision.
Research has shown that when complex situations present themselves, women are more likely to evaluate the nuances in the details, while men tend to focus on fewer pieces of data. As you can imagine, this often decreases the quality of the man’s decision-making process and boosts the quality of the woman’s.
Get Rid of the Unnecessary Jargon
Merrill Lynch recently pointed out that even among men and women with similar levels of financial knowledge, women are more likely to say they don’t know enough.
Many of our clients have walked into our office believing they were not adept at handling their finances when, in actuality, they just needed to have their questions answered in a straightforward and transparent way.
More Women Are Taking Charge in Money Matters
The good news is there are early indications that societal changes are improving women’s “confidence” around money, particularly in the younger generation because they are gaining more access to information.
Women ages 25–34 are more likely than their elders to report they learned about finances from one or both parents (62%, compared to 45% of older women), and over half (51%) say they are very confident in their investing skills.
This final statistic is in stark contrast to their elders: Only 36% of women ages 35–49, 14% of women ages 50-69, and 11% of women ages 70–84 said they feel confident in their investing skills.
So, how can we ride this new wave of financial confidence?
In Our Experience
Women often discount their financial savviness without considering areas of their lives in which they are already smart about money — family budgeting, volunteer work involving financial management, managing medical issues, and advocating for family members and loved ones.
Women are adept at picking up financial concepts if they are explained without unnecessary jargon or obscure concepts.
And if women are clear about their goals and values, they’ll find making decisions can be simple and straightforward. Once our clients have defined what matters most, decisions fall into place more easily. Aligning our financial resources with our highest priorities and values can provide relief and a sense of certainty.
Keep the Conversation Going at One of Our Circles
We regularly host Conversation Circles for women who are interested in straightforward and authentic discussions focusing on the non-numerical aspects of personal finance. Everyone is welcome — let us know if you’d like to be included in our next Circle!