Money and emotions
People of all genders, rich or poor, feel anxious when dealing with their personal finances. Many people in the UK do not understand pensions or saving enough to afford their retirement. Without motivation to learn, people avoid dealing with money altogether. One way to find this motivation, as girl math shows, is by having an emotional and tangible connection to our finances.
On the surface, it may seem that women are being ridiculed and encouraged to overspend by using girl math. From a different perspective, it hints at something critical: for a person to really care about something as seemingly abstract as personal finance, they need to feel that they can relate to it.
Thinking about money in terms of the value of purchases can help create an emotional relationship to finance, making it something people want to look after.
The girl math we need
Women are a consumer force to be reckoned with, controlling up to 80 per cent of consumer spending globally. The girl math trend is a demonstration of women’s mastery at applying portfolio theory to their shopping, making them investment powerhouses whose potential is overlooked by the financial services industry.
Women are disadvantaged when it comes to money and finance. Women in the UK earn on average £260,000 ($555,200) less than men during their careers and the retirement income of men is twice as high as women’s.
As I’ve found in my research on gender and finance, women have lower financial self-efficacy (belief in their own abilities) compared to men. This is not helped by women feeling patronised when seeking financial advice.
Because the world of finance was created by men for men, its language and culture are intrinsically male. Only in the mid-1970s did women in the UK gain the legal right to open a bank account without a male signature and it was not until 1980 that they could apply for credit independently. With the law now more (but not fully) gender equal, the financial services industry has failed to connect with women.
Studies show that 49 per cent of women are anxious about their finances. However, they have not bought into patronising offers and mansplaining by financial advisers. This outdated approach suggests that it is women, rather than the malfunctioning financial system, who need fixing.
Women continue to feel that they do not belong to or are able to trust the world of finance. And why would women trust an industry with a gender pay gap of up to 59 per cent and a severe lack of women in senior positions?
Girl math on its own isn’t necessarily good financial advice, but if it helps even a handful of women feel more empowered to manage and understand their finances, it should not be dismissed.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
- By Ylva Baeckstrom - senior lecturer in finance, King’s College, London
