What Women Want

Understanding women can be a challenge for the average male, but for businesses there are many subtle things that businesses must appreciate in order to help them understand why women behave the way they do.  This particularly relates to finance and investment.

Research from CoreData has found that women adopt a more conservative approach to managing their finances than men. Men typically are more concerned about investing and tax, while women often express a higher level of concern about long term superannuation, saving, paying off loans and family financial matters. This should not be a surprise; after all, females have a greater life expectancy than males. Male partners may not necessarily see the need to accumulate sufficient assets in order to last say seven years longer than their life expectancy.

Women are also significantly less likely to own their home outright and are more likely to be paying off a mortgage than men. This latter finding may be more a function of affordability and pay than conservatism.  The number one reason given by women for not owning a home is that they don’t think they can afford it. This is obviously more of an issue for women without partners, than men without partners.

The finding that is most concerning is the revelation that women in general are considerably less knowledgeable and confident about money matters than men.  Men are almost three times more likely to have good financial literacy and confidence than women, and are twice as likely as women to have a high level of financial control in their household. This finding really supports our view that overall financial literacy is low, and that the failure must be attributed to our education system. Financial literacy should be an important component of the education curriculum, and it needs to be taught early on (no later than Years 9 & 10). If it is only taught at senior levels, too many people will miss out.

When it comes to funding expectations for retirement, women are less confident that they will have the level of wealth they require to finance their lifestyle. This may simply be realism. Many people have insufficient investments to adequately fund their lifestyle in retirement. Taking advantage of this is what the purveyors of get rich quick property investment schemes targeted. They marketed them as a way to get ahead quickly. Unfortunately many of the investors simply lost a lot of their own money and their lenders money, and ultimately their own homes when the inevitable disaster struck.

The average man was found to have a higher level of financial control of and confidence about their finances than the average female. This lack of confidence could explain why many women tend to play it safe when managing their finances, choosing to focus on saving and debt management over investing.

The research revealed that less than two thirds of women pay off the full balance on their credit card each month, compared to three quarters of men. This clearly shows that the majority of males and females are simply living beyond their income levels, and that they pay a lot of unnecessary interest to their credit card providers.

Given the dominant position of banks as providers of credit cards, and increasingly investment management businesses, the banks have the market covered. They are going to take their fair share of any income received. The earnings for a financial institution from a $5000 credit card debt are probably around the same as for a client with a $200,000 investment portfolio. And there are many times more people with credit card debts, than there are with portfolio investments of more than $200,000. So it is little wonder that we see so much advertising targeting spend now, rather than save for our retirement. Our experience is that it is often the female partner that will seek assistance over investment matters. This is not just a matter of being more conservative, but a reflection that females are often better at networking in order to gain the information they want in order to make important decisions about their future.