Women, Finance, and Money Myth Busting
- March 14, 2023
- By: Greenpath Financial Wellness
Abigail Adams didn’t receive a formal education and went on to become the earliest documented female investor in the United States.
Maggie Lena Walker was the daughter of slaves and also America’s first female self-made millionaire.
Muriel “Mickie” Siebert lied about having a college degree in order to receive job training and became the first female member of the New York Stock Exchange.
These are just a handful of famous women in history who forged a financial path during a time when women didn’t have a seat at the table. In celebration of Women’s History Month, we want to honor these glass ceiling busters by busting some common misconceptions about women in the financial sphere. History, media messaging, and popular culture have deepened some strongly held stereotypes around what women can and can’t do where money is concerned, and we’d like to lend our voice in setting the record straight.
Myth #1: Women now earn as much as men.
Reality: While women’s financial landscape has certainly changed since Abigail Adams’ heyday, gender inequality in the workplace persists today. In 2022, women earned 82 cents for every dollar men made even when you account for education and experience. This is not to say that progress hasn’t been achieved. Up until 1974 when The Equal Credit Opportunity Act was signed into law, women couldn’t apply for credit, take on a mortgage, or even open their own bank account without their husband’s consent. Women enjoy more financial freedoms in 2023, but sweeping assertions that women are finally enjoy a level playing field are false.
Myth #2: Women aren’t interested in investment planning.
Reality: Despite being disproportionately impacted by the pandemic, 67 percent of women invest outside of their retirement accounts, according to a 2021 Fidelity study (by comparison, this number was 44% in 2018). And while it’s true that more men invest overall, it’s worth pointing out that women actually have a slight edge when it comes to investment returns. On average, women’s positive returns surpass men’s by 0.4%. In considering long term goals—versus short term gain—women are more likely to adopt a buy-and-hold strategy versus frequent trading which can negatively affect performance across time.
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Myth #3: Women are spending money more frivolously than men.
Reality: A study by Smart Asset comparing single millennial men and women looked at spending across 11 categories and found that, overall, men earn more and spend more than women. While that spending was comparable in categories like housing, utilities, and healthcare, one notable discrepancy was that women spent $850 more per year in the category of “reading and education” and $620 less than men in the category of “alcohol and tobacco.” The study’s results also showed that while women spend more in the category of “apparel and personal products”—a number likely inflated by the Pink Tax which is a markup on goods marketed to women—men spend slightly more on eating out. The takeaway? Determining who is doing more non-essential spending depends entirely on what category you’re looking at.
Myth #4: Most women rely financially on their partner.
Reality: Women’s place in the home is a very different picture from decades past when married, heterosexual males were the primary breadwinners. The folks at the Urban Institute revealed that women are now the head of household in half of the homes in America. They are also increasing their presence as homebuyers, as higher education and income levels can put homeownership within closer reach. There have been gender shifts for unmarried people as well. In a parallel finding, The National Association of Realtors’ 2020 report found that single women own more homes than single men.
Myth #5: When it comes to work and home life balance, women can have it all.
Reality: One of the dominant messages to emerge from the Women’s Movement was the idea that women don’t have to choose between having a fulfilling work or home life—you can have both! While empowering in theory, increased awareness and study sheds light on how disempowering this mentality can be for women who are exhausted in striving for perfection. A 2022 Women in the Workplace report by LeanIn.org. reveals that among entry-level employees, women are about twice as likely to be simultaneously managing housework; among employees in leadership roles, the gap nearly doubles. This imbalance can lead to burnout: 29% of women in the report are considering reducing their hours, downshifting their role or quitting.
Get Connected with GreenPath
We’re always on a mission to dispel money myths here at GreenPath, including the myth that there’s a one-size-fits-all approach when it comes to personal financial planning. We want to meet you exactly where you’re at, learn more about where you want to be, and steer you towards the financial milestones that matter most. Get connected with us today so we can be part of making this year a financially healthy one.
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