Louise L. Hay an American motivational author famously said, “Men don’t cry! Women can’t handle money! What limiting ideas to live with.”
I agree wholeheartedly Louise.
In the 21st century, there are still people who believe (some women and parents of women) that we are not capable of handling money and men are inherently better at it. In fact before this study was released, many previous studies stated that women were more risk averse and cautious when investing than men. The report by Merrill Lynch Women and Investing: A Behavioural Finance Perspective states yes the above assumption holds true when both groups are viewed only through the gender lens. When viewed through social, demographic and circumstance factors, it seemed that both sexes are more alike in their investing behaviour than previously thought. If women are considered prudent decision makers with household money than why not when it comes to personal loans, real estate or the stock market?
Dispel the gender myths about money
Take action today and put in place a financial plan, no matter if you’re about to earn your very first pay cheque or have been working for some time. Address the 5 myths below to start building a better financial future.
Myth #1: Men are better with money than women
No gender is “better” at managing money as found by the Merrill Lynch report above. When it comes down to the details, men and women show very similar investing behaviour. In fact research shows that women have higher returns (net) on their investments than men do and are less likely to sell and buy stocks impulsively. You can learn about investing by reading the news, talking to a financial advisor, or even attending seminars run by various organisations. Check websites or companies providing information for beginner investors (most banks and brokerage firms have tons of resources on their site (from webinars to videos).
Myth #2: You need to have a lot of money before you can start investing
Not true. In fact money invested early will hold more value than money invested at a future date (cue compound interest). If you want to start buying stocks through an online broker instead of a full service broker, most brokerage companies will allow opening of an online share trading account with a standard brokerage fee and no ongoing monthly fee or charge fees for both. It depends on how often you trade and the fee charged for transacting shares. But some brokerage firms and banks can let you open up an online share trading account for as little as $500 and sell shares for $15 per transaction depending on the share value.
Beware of anyone offering “get rich quick schemes” as most places might require you to sign up via email before you can access the material on their website OR a promise of quick returns over a short period of time. Any investment worth investing in should give steady returns over a long period of time.
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Myth #3 : A man is a financial plan
Untrue. In this age of dual income household and diverse family structures; depending on your partner solely is not a great idea. If you’re taking time out from the workforce, Susan Jackson from Women’s Financial Network suggests splitting super. The working partner makes regular contributions to the account of the unemployed spouse/partner in order to keep up the spouse’s contributions to their super account. Have your own investments; don’t always buy everything in joint names in case the relationship does break down and don’t sign anything you don’t fully understand. You don’t want to assume a financial burden which your partner signed up for in case the relationship ends.
Myth #4: You won’t need super until retirement so don’t worry about it now
With living and health care costs rising and women set to outlive men, an extra dollar saved into super today will mean more money for you in future. Take advantage of salary sacrificing which automatically sends a set portion of your income into your super account. For high income earners, this gives the added benefit of reducing taxable income. If you’re in the low income bracket, the government will match after tax contributions to super up to AUD $1000. Find out what government initiatives and schemes are available to benefit from these.
Myth #5: It’s too hard, I don’t have time…
Stop self limiting thoughts about money in its tracks. Instead use money to empower yourself by having a budget and learning about it so you control it and not the other way around. Not giving importance to money, spending it without a plan or telling yourself that you’re not good with money and will take care of it at some point in future, are all beliefs holding you back from growing your money at a time when you have income coming in. If you’ve read Rich Dad, Poor Dad by Robert Kiyosaki some of these beliefs are what prevents people from building true wealth.
Start small and grow your money – starting today.
This post was written in collaboration with People’s Choice Credit Union and is general advice only. Terms and conditions apply to any product you consider.