Debt And Money Management – Differences Between Men And Women

In today’s tough economy, it seems pretty normal to have debt. Most people today, regardless of their financial status, are into debt. In many times, financial decisions are based on emotion rather than logic. The question now is, who have more debts, men or women? What factors are behind this interesting phenomenon?

Statistics on Debt and Money Management Between Men and Women
According to research, there is a significant difference between how men and women generate economic decisions. Their economic choices are actually influenced by behavioural psychology, neurobiology and brain chemistry. It was further found out that there is a substantial difference on how men and women manage money, spend resources and handle debt.

Research shows that women are more prone to impulsive buying compared to men. While 4.5% of men’s population claim that they have difficulty in resisting sale, 23.7% of the women’s population actually buy unplanned things which they don’t necessarily need.

Most women spend for fashion accessories, dress, bags and shoes. Meanwhile, men spend most of their money on electronics, gadgets, cars, liquor drinking, eating out and sports tickets. It is believed that women tend to overspend due to societal influence and pressure to stay in fashion while most men spend excessively to impress women.

Men and Women in Debt Management
Through the years, there has been a significance rise in the number of men and women who seek for financial advice. However, women remain the #1 client of financial advisors. But this doesn’t imply that women have more debts than men. Rather, women have more positive outlook that debt can be resolved and they have recognized that problems on debt really exist. Men are less likely to seek for financial advice mainly because of their ego.

Why is this possible? Blame it on HORMONES.

What Roles Do Hormones Play in Debt and Money Management
The surge of testosterone hormones in the body stimulates the “winner effect” which increases their ability to take risks. While it can be beneficial at times, the “winner effect” can also drive men to produce non-feasible financial decision.

With each win, the level of testosterone in a man’s body tends to increase. In the long, it can impair men from making rational and effective decisions. One study concluded that testosterone hormones create quick wins for men but they are more likely to be followed by losses. On the other hand, women will tend to outperform men with their steady and slow wins.

Changes in Organization Culture
Through the years, there has been a significant change in the culture of many organizations in Europe. Women are now allowed to participate in decision making and of course, they are given higher positions in companies.

Women are believed to be better money managers, hedge funds managers and profitable investors compared to men. Men are thought to be more optimistic than women. Their intense optimism drives them to become more aggressive in making decisions. But of course, this only applies to younger males as they experience a great surge in testosterone level regularly.

Levels of testosterone in the body incur diverse effects to the decisions of women. Low level of testosterone makes women less productive while high levels result to the generation of selfish decisions.

Men and Women in Making Investments
Since most men are risk takers, they are more likely to invest in certain business endeavours compared to women. Most women are insecure about their knowledge in financial issues which repels them from making investments.

Men and Women in Saving
There have been diverse claims about the saving behaviour of women. While there are researches revealing that men are great savers while women are extravagant spenders because of their spendthrift shopping activities, some researchers claim that women are indeed better saver, spender and investor.

Women are less likely to make investments but they are more inclined to engage in long term financial planning. While many women are less risky in making investments, studies show that they can be as productive and successful as men when they engage in certain endeavours.

Despite the fact that most women earn less than what men earn, women tend to save more because of their huge interest to save. In the UK and Ireland, women are claimed to be better spenders and they manage to build larger savings compared to men.

This entry was posted in Saving & Spending. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *