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Debunked: Three Myths About Women and Money

March 19, 2014
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When it comes to spreading information about women and money, American popular culture does a pretty good job of mucking up the message. It turns out that, when you look at the facts, many of the common conceptions we have about how women manage their finances are actually misconceptions.

The Nerds combed through the data and are here to unravel some of the most damaging myths about women and money. Take a look at the information below and get ready to be impressed with how sharp women actually are when it comes to money matters.

Myth #1: Women have more debt than men

Television and movies make it appear that women are a bunch of spendthrifts, swiping their credit cards at every shoe store and sample sale in town. But the reality is that when it comes to sticking to a budget and keeping out of debt, men are actually the ones who should exercise a little more self-control.

A 2013 study released by Experian, one of the three major credit bureaus in the U.S., shows that men carry 4.3% more debt than women do. What’s more, men have a 2% higher credit utilization amount and are 7% more likely to make late payments on their mortgages.

So it seems that women’s debt management skills are actually slightly better than men’s. Because all of these factors (debt load, poor credit utilization, late payments) impact our credit scores, it’s possible that future data will show that men’s average credit scores are slipping below women’s.

All this means that the tired stereotype of the reckless, maxed-out woman can be put to rest once and for all!

Myth #2: Women are too emotional to be good investors

The financial community is rife with sexist attitudes about female investors, stemming from the notion that women are too emotional to invest properly. However, there’s both micro- and macro-level evidence that this perception is bunk.

In the world of professional investing, female hedge fund managers outperformed their male counterparts in 2013 (as of the end of November). The Economist reported that women fund managers returned 9.8% for their clients, compared to the industry average of 6.13%.

When it comes to personal investing, it also seems that women have an edge on men. A recent seven-year study showed that single female investors outpace single male investors by an average of 2.3%.

There are many possible explanations for why women seem to be better investors than men, but most experts believe it has to do with the fact that men trade more frequently than women. More trading is associated with losses over the long run, so it seems that women’s caution when it comes to investing (often dismissed as fearfulness or oversensitivity) is actually serving them well.

Myth #3: Women don’t understand the long-term financial importance of buying a home

Purchasing a home is one of the best investments you can make, and contrary to popular belief, it seems that women are hearing this message loud and clear.

A 2012  study by the National Association of Realtors showed that single women make up 18% of homeowners; single men make up only 10%.

The fact that single women make up almost one-fifth of homeowners is exciting on its own, but this data also indicate that women have the credit scores and incomes necessary to obtain mortgages on their own. This goes to show that women are doing well on a variety of financial metrics, and it’s likely that they will continue to achieve other financial goals in the future.

The bottom line: Don’t rely on the media to give you a realistic picture of how women handle their money—most of these portrayals are inaccurate, and some are downright offensive. When it comes to managing debt, investing and homeownership, the ladies in your life are likely doing just fine.

Woman saving image via Shutterstock.