In a decade-long Prudential survey that studied the financial experiences of women, research data showed that since the 2008 financial crisis, women have made significant improvements in their financial behavior. Still, many continue to admit a lack of knowledge and understanding of sophisticated financial products.
That lack of knowledge causes more than 50% of women to rely on someone else to make financial decisions regarding their future. On the other hand, the study dispels several myths about female financial behavior, casting a more positive light on women's money habits.
Here are four common money misconceptions about women.
1. Women Are Impulse Shoppers
One of the most common misconceptions is that women are impulse shoppers. Data from the survey showed that often, the last-minute purchases referred to as impulse buys are made using funds already set aside within a budget. And the majority of respondents (70%) claimed to spend based on need, not wants.
2. Women Don't Know How to Manage Money
Most people don't fully understand money management — but that's a problem for both sexes, and not unique to women. However, a majority of women distrust the process of turning planning over to a financial professional — six in 10 prefer the help of family and friends. This differs from men, who often prefer outside sources of help.
3. Women Don't Understand Retirement Planning
Women's understanding of workplace retirement plans and IRAs showed considerable improvement since the 2008 crisis, up from 47% to 72% of respondents. While many women have more to learn about other retirement products such as annuities, a majority of female respondents have seen progress in their understanding of retirement planning.
As women increasingly become primary earners or amass significant net worth of their own, their financial behaviors and understanding of money management will undoubtedly continue evolving.
4. Women Don't Make Financial Decisions in Their Households
The belief that women don't make household financial decisions is an entirely outdated and erroneous one, according to the data. The survey showed that 95% of women consider themselves financial decision makers, and 85% of married women say they manage the household's financial decisions themselves, or jointly with their spouse. That means today's women are developing (or in many cases already have) a much more thorough understanding of personal finances and investing than earlier generations.