Helaine Olen, a financial journalist and author who says that a lot of the finance industry is condescending to women, at her home office in New York. Research shows that men and women are more alike than the conventional wisdom suggests when dealing with money matters.

Karsten Moran • New York Times,

Women deserve more credit for their financial knowledge

  • Article by: ALINA TUGEND
  • New York Times
  • June 29, 2013 - 4:15 PM

On occasion, when my female friends and I are sitting around talking, the issue of money will come up. And generally, most will readily admit that they don’t know anywhere near as much about their family finances as they should.

I find that interesting, but not surprising. After all, so many studies and news media reports reinforce the idea that women lag men in understanding how to handle their money.

But recently, some experts in personal finance are challenging the common wisdom, saying that the differences in how men and women deal with finances have been overstated. Further, they say, it does no service to women to portray them as naive and in need of special help.

“A lot of the industry is flat-out condescending to women,” said Helaine Olen, a financial journalist and the author of the book “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.”

The real problem, Olen said, is that women often earn less money than men yet live longer. They also tend more frequently than men to drop in and out of the labor force to stay at home with children.

“I’m afraid this niching of women is a way to get around the systemic problems” that need to be addressed through public policy, she said. Olen also said that some of the advice for women, like to cut back on shopping, is unhelpful at best and sexist at worst.

A 2011 Gallup poll showed that men spend $11 more a day than women, Olen wrote in her book.

Annamaria Lusardi, a professor of economics and accountancy at George Washington University and the academic director of the Global Financial Literacy Excellence Center, said the idea “that women spend more is a myth.”

But she said there is a clear gender difference when it comes to financial literacy, not just in this country but around the world.

Prof. Lusardi was co-author of a study of eight countries — the United States, Japan, New Zealand, Germany, the Netherlands, Sweden, Italy and Russia — that found that the overall level of financial literacy was low. According to the study, Americans had a harder time with simple calculations, but no country stood out as being particularly knowledgeable.

The study, “Financial Literacy Around the World: An Overview,” was published in 2011 in the Journal of Pension Economics and Finance.

Lusardi said women in all the countries studied were less likely than men to correctly answer questions about financial literacy, particularly those that used technical terms. The more sophisticated the question and the more financial jargon that was used, the less likely women were to answer the questions correctly, she said.

But she said the takeaway shouldn’t be that women were more ignorant.

Here’s one example: “Buying a single company’s stock usually provides a safer return than a stock mutual fund.” The answer options are “true,’’ “false,’’ “do not know’’ or “refuse to answer.’’ (The answer is false.)

In the United States, men answered correctly 57.1 percent of the time, compared with 46.8 percent of women. In Germany, both sexes picked the right answer more often than those in the United States did, but the difference between the sexes was similar, with 67.6 percent men and 56.8 percent of women scoring correctly.

But, and this is interesting, “When we took away the ‘do not know’ option, women were no less likely to choose the wrong answer,” Lusardi said. “So if forced to pick an answer, women seem to know as much as men.”

When women and men were asked to self-assess their financial knowledge, men tended to give themselves high scores — even when that is not warranted by their actual knowledge — while women tended to give themselves lower scores.

“Women are aware of their lack of knowledge,” Lusardi said, while “men are less willing to admit what they don’t know.”

Manisha Thakor, a financial adviser who runs MoneyZen Wealth Management and specializes in helping women, agreed that everyone struggles with financial information.

Investing has become more complex, she said, “and formal education in the traditional academic setting hasn’t kept up. Both genders are confused, but my experience as a professional is that women may be more willing to ask for information.”

Thakor compared it to the cliché that women were more inclined to ask for directions than men.

Said Olen: “All talk should be understood by both genders.”

As she writes in her book, “There is a fine line between making the industry more friendly to women and overtly condescending to them, and frankly, it is a line few have managed to tread successfully.”

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