Myth #4: Women Lack Confidence When it Comes to Money

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Over the last few years, much ink has been spilled over women and their lack of confidence. Female executives have written books with several chapters dedicated to the topic. In 2014, one of The Atlantic’s most popular cover stories popularized the term “the confidence gap” and examined the empirical research on the issue. Even beauty magazines now have subtitles like “Eight Qualities of Highly Confident Women” and “Your Guide to Killer Confidence,” framing confidence as a supposedly easy character trait to adopt while you’re waiting in line at the grocery store.

Despite being hackneyed, there is good reason for the discourse around this topic. An overwhelming amount of evidence has shown that the “confidence gap” has been a problem historically. In the world of finance, this concept has manifested itself by depicting women as timid, indecisive investors, insecure about their financial knowledge and decision making. But there are signs that the tides are changing – so much so, in fact, that we would argue that women lacking financial confidence is a myth.

One reason women are perceived as being unsure of themselves is that they often make decisions differently than men do. 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 can easily be misinterpreted as indecisiveness and insecurity when in fact, that woman is simply taking time to reach to a well-informed decision.

In fact, 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.[1] As you can imagine, this often decreases the quality of the man’s decision making, and boosts the quality of the woman’s.

Making decisions about money is complex and nuanced, something women are good at. So where is the disconnect? Women simply want to know more before making an important financial decision. 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.[2] 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.

The good news is that 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 age 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)[3], and over half (51%) say they are very confident in their investing skills. This is in stark contrast to their elders: only 36% of women age 35-49, 14% of women age 50-69, and 11% of women age 70-84 said the same.[4]

So, how can we ride this new wave of financial confidence?

In Our Experience:

  • Women discount their financial savviness without considering areas of their lives in which they are already smart about money – family budgeting, volunteer work that involves financial management, managing medical issues, 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.
  • If women are clear on their goals and values, 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.

Our Advice to You:

  • Women generally prefer to learn in group settings which are much more supportive and collaborative. We learn from each other as we share our hard-won wisdom. Such a setting – whether the subject is personal finance or meditation – may be just the ticket.
  • We believe that self-reflection leads to self-knowledge – and is a natural precursor to building confidence. Spend some time, structured or otherwise, getting clear on what you care about most. If you’re feeling stuck, we can provide some helpful exercises.
  • When your questions are answered with spin, insist on clarity, transparency and an absence of condescension.
  • We regularly host conversation circlesfor women who are interested in straightforward and authentic discussions focusing on the non-numerical aspects of personal finance. We talk with one another about what matters, discover ways to apply our unique strengths to our finances, and share our stories, experiences, and collective wisdom about money. Everyone is welcome – let us know if you’d like to be included in our next circle!

Ready for a deeper dive? Give us a call if you have questions or would like to talk – we’re here to help.

What’s next?  Stay tuned for Myth #5:  Women are less interested in investing.

At The Humphreys Group, it’s no secret that we revere the many ways women today are breaking through gender stereotypes. Lately, we’ve been especially fascinated by stereotypes that permeate discussions about women and money. These phrases probably sound familiar: “Women aren’t interested in investing. They lack confidence about their financial decisions. When women do invest, they’re too risk averse.” By and large, these – as well as many other commonly accepted notions in finance – are all myths.

That’s why we’re writing this series of articles busting myths about women and money, and shining a light on the data that disproves them. We’re also sharing what we’ve learned from our work with clients, and offering some thoughts on what we can all do to re-direct the conversation from myth to truth.


[1] “Are Women Better Than Men at Multi-Tasking?,” BMC Psychology, October 2013

[2]“Women and Investing: A Behavioral Finance Perspective,” Michael Liersch, Fall 2015

[3] “Ameriprise Study Reveals More Women are Taking Command of Their Finances,” Ameriprise, June 2014

[4] “Assessing the Landscape, Female Investors and Financial Advisors,” State Street Global Advisors, 2015