Some of us are good at managing money. A big majority, I would argue, are not.
Gender has little to do with it. Women per se are no better at coping with money matters than men. It is the underlying system that is broken and needs to be addressed.
My view is that poor financial education is to blame for this dearth of sound money management across genders. Women are no smarter financially than men – and vice versa. We all need to be better financially empowered.
Until recently, most of us left school financially illiterate. Certainly, when I left home to go to college in the late 1970s, ‘A’ levels in pure mathematics and economics did not prepare me for the harsh financial world. Far from it.
Yes, I knew my differential equations inside out and everything anyone would ever want to know about economist John Maynard Keynes, but I had no idea how to choose a bank account. Nobody warned me that taking out a credit card required financial discipline – something I lacked in my early years as parties, not pensions, took priority. I learnt the hard way that credit cards only work for you if you clear the balance every month. But it took a while for the penny to drop. It was no different with my wife. Like me, she went on to further education and completed a degree in banking and finance. She is cleverer than me, but she would be the first person to say she was no better with money than me – despite the subject matter of her degree. We were both a product of an educational system that prioritised academic learning and ignored preparation for the big bad world outside.
While financial education in schools is improving – and Moneywise has done its part in acknowledging the great work some teachers do in making pupils money smart, with its Personal Finance Teacher of the Year awards – there is still a long way to go.
Although it is now part of the secondary school curriculum – but not so at academies or free schools – money teaching remains on the periphery. Too many children still leave school without the knowledge to deal with a complex financial world. As a result, they fall all too easily into the trap of getting into debt, not helped by peer pressure, predatory lenders and social media (spending is cool). Of course, student loans have perpetuated a belief that debt is both acceptable and inevitable.
If we want the adults tomorrow to be smarter with their money, we need to encourage the government to do more to train teachers to teach money matters with confidence. That is the key issue – not whether men are better or worse with money than women..
Where I think there is a big gender gap in personal finance is in its delivery. For too long the financial services industry has been run by an exclusive band of men – well educated (more times than not), profit-centric and money obsessed. It has led to an industry that is primarily sales driven and not consumer focused.
There is no doubt in my mind that it is this male elite – and beneath them battalions of testosterone-fuelled salesmen – that has been responsible for the series of mis-selling scandals to besmirch the financial services industry’s reputation – everything from the mis-selling of endowments through to personal pensions, payment protection insurance (PPI) and an array of complex financial products.
I am sure that if the financial services industry had been more inclusive in the boardroom and in senior management positions, it would have been more customer-centric, less interested in the quick sale, and more concerned with building lasting customer relationships and we would not now have a financial services industry that is mistrusted by most consumers.
So I welcome more women in senior positions across the personal finance industry. It is happening, but at a snail’s pace. I also would love to see more women in the financial advice industry. Some of the best advisers I have sought help from have been women. Empathetic. More understanding.
One final point on gender and money. I am proud to be part of a personal finance journalism profession where there are as many women commentators as men. Between us, we are trying our hardest to do our bit to make all women and men more financially savvy.
That is what we should be striving for – an idyll where a financially educated public are well served by an inclusive, consumer-oriented personal finance industry.
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