Are women really that irrational?

Today I wanted to share a great post from one of my favourite PF blogs – I Will Teach You to Be Rich. It’s about the different way magazines approach personal finance and namely, the differences tend to run along gender lines. In a nut-shell Nina Smith from Queercents discovers that women tend to be talked down to when it comes to personal finance while men get given ‘real’ financial advice. Things aren’t sugar-coated in periodicals that have a high percentage of male readership where as women’s magazines focus on ‘the basics’ and make assumptions that women are starting in a poor financial position and should be ‘investing’ by cutting the grocery bill or starting an emergency fund.

I know personally that I am no idiot. I know exactly what I need to do in order to be financially secure. There is a difference however, between knowing and doing. It is the same principle as weight-loss. I think it fair to say that most people who want to lose weight know how to do it, it’s simple right – you have to consume less calories than you expend. But that’s just it; it’s not simple. It’s hard to deprive yourself of things you want. It’s hard to motivate yourself to exercise when you don’t want to. And what’s worse, when people fail they feel bad about it and when they feel bad food is their comfort.

In personal finance it is easy to avoid debt and to save. It is as easy as living within your means. All you have to do is spend less than you earn. Yet, for millions of people this is not simple at all. True, for some it is because they just don’t earn enough to make ends meet even when they do live frugally. For many, I would even venture to say for most, this is not the case. The problem is not that they don’t know what to do; it is just that they don’t want to do it – not really. I could easily have tens of thousands saved by now. I have worked full-time in ok paying jobs since I left high-school (7 years ago). Even while studying law I worked 9-5 everyday. I didn’t have many expenses; in fact for a while I didn’t even have to pay rent. But somehow I managed to spend the lot. To be fair I have traveled a fair amount and I think that was definitely worth it. I also think that being young is about having fun with your friends and not about sitting at home watching your pennies pile high. But even taking into account a yearly overseas trip and a night out with the girls once or twice a week I should have a lot more saved.

The problem is I don’t always make rational decisions. I know that someone on my salary can’t afford to wear the same brands as celebrities making millions of dollars. But that doesn’t stop me wanting to. I also know that it is cheaper to eat in or take my lunch to work but that doesn’t mean I’m always going to. My husband on the other hand is completely and utterly rational. In fact, he can’t even comprehend how someone allows themselves to get into debt. After talking about it last night he laughed at the idea that people tie their emotions to their money, in fact I believe his exact words were ‘money isn’t emotional; its math’.

Although, I don’t think I would ever let myself go into debt,* I can see how easy it is for others. I have been tempted to put things on credit or get a car loan in the past when I knew it wasn’t the most sensible option. I stopped myself, but I was tempted; very tempted. And now I am in a position where I have very little of what I could have possibly saved/invested sitting in a high interest bank account.

I don’t know if it is a coincidence that I, with my money weaknesses, am a woman, and my husband, with his 100% rational thinking, is a man. In my parents case I would say that my mother is probably the thriftier of the two but I don’t know if that means she is more rational. I definitely know men who have been very stupid with their money and I know women who have been very smart. So I don’t think it is as simple as saying that men are better with money and so women need their hands-held as they are taken through the PF process step-by-step.

For me, it is a bit of a ‘chicken or the egg?’ scenario. I don’t believe that there is something inherent in a woman that makes her a poor manager of money so I wonder why women are treated as though they are a little clueless financially. Are articles aimed at women written from a ‘start at the bottom’ perspective because women are at the bottom or do women feel that its ok to be at the bottom because these articles reinforce that other women are and hence, if other women are its ok if the reader is too?

I think it’s important to remember where these female-friendly articles are in the first place. As an avid (well formerly-avid now) reader of women’s magazines I can tell you one thing for free – each page is usually a thinly veiled advertisement. And guess what, no one, not even banks, are advertising the virtues of saving money. So wouldn’t articles that actually encourage women to be responsible with their money actually be bad for the magazine? If I read an article on how much money I could be making by investing in this or adding that to my portfolio I am going to start thinking twice about spending a month’s (or more!) salary on the latest ‘IT’ bag. And, if I am in a financially secure position and therefore, not suffering any of the stress related to debt I am going to feel a whole lot better about myself aren’t I? So why would I want to know about that new fat melting laser treatment or even the latest perfume that will make him fall in love with me.

For me, the fact is that women and men are treated differently because of the expectations society puts on them. My husband said to me not long ago ‘you know Liz, the difference between you and I is that when you get dressed you try to look as good as possible; when I get dressed I just try not to look bad.’ Although with the metrosexualisation of men I think this is beginning to change the fact remains that traditionally women are meant to look better than men. Older men are congratulated for snagging young attractive women – their financial status doesn’t matter because the man can provide for them both. Women try to catch themselves a wealthy husband and so looking good is an investment. Hundreds of dollars on hair, clothes and make-up could earn them a life-time of financial security, seems like a good investment to me. Of course, this isn’t true for everyone. As mentioned above, things are changing (helped along by the higher rate of tertiary educated women for a start). In my case I did marry a man 9 years my senior but I didn’t do it for financial security. In fact, in the next couple of years I should begin to out-earn him. And he’s just fine with that.


*I should clarify that when I say debt I mean bad debt, I think a mortgage is good debt (so long as you can afford to repay it) because if you are buying smart you house should always appreciate. A HELP loan is a good debt because without it I could never earn what I will earn as a solicitor. A car loan, especially for a new car is bad debt. There's just no way you're going to get that money back. A credit card that is accumulating interest is bad debt, no explanaination necessary. A purchase plan for new furniture/appliances etc is a bad debt- it will never be cheaper than paying upfront and once again, those items will never be worth more than they are on the day you bought them.