Men Save, Women Splurge: Why Are We Made To Feel Guilty About Spending?

The frugal men and the frivolous girls. The henpecked husband and the high-maintenance wife. The investors and the spenders. There is a fairly obvious gender divide when it comes to money – but is there really truth behind it, the fire underlying the metaphorical smoke?

But first, let us establish that there indeed is a divide when it comes to our perception of how men and women spend their money. In a linguistic study of 300 finance articles, it was seen that a whopping 65% of articles in women’s magazines, characterized their female readers as “excessive spenders”, and published articles revolving around budgeting, being frugal, and avoiding retail therapy. The men’s magazines, on the other hand, egged on their male readers to “conquer” the financial world by learning how to earn more and invest in high risk-high reward investments. It is simple; the men are to focus on increasing their income, while the women try to get their (obviously uninhibited) spending under control. The implicit assumptions are also equally straightforward – the men are the primary earners, and the women, the primary spenders.

While most of us would now disagree with the first one – women now form almost half of our workforce, even though they earn lesser than their men counterparts – the second one is still deeply entrenched in our minds. If we were to believe the advertisements, we would imagine that women spend all their (and their husband’s) money on shoes and bags. And it’s true, women do spend more on clothing than men. It could be because they are frivolous and shallow, which is how it is portrayed, but could it also have something to do with the fact that society places a premium on women’s looks, including impacting how much they can earn? Or could it be influenced, even partially, by just how much more expensive women’s clothing, including essentials, are, in a blatant exhibition of the pink tax?

Humour me for a bit. Let us suppose that women are indeed profligate with their money. Then they would also spend more on categories like takeout, alcohol and cars. We all know that’s not true. Men spend more in these categories, for the same reason that women spend more on apparel – it’s socially expected and encouraged. And overall, men spend more than women.

However, if married with the fact that women make less money in the first place than men, women do spend a more sizeable portion of their earnings, albeit involuntarily. The first reason is the obvious one – when you make little money, you are forced to spend more of it. It is expensive to be poor.

The second and more important reason is that saving and investing has always been an old boy’s club. The financial services industry, from banks to mutual funds, has always catered to men. Women are not even spared this unfair treatment at home, with a study showing that boys were much likelier to inherit knowledge of basic financial literacy like investing, taxes, and credit scores, than their female siblings. This directly feeds into each gender’s retirement savings, with men setting aside much larger sums, because they have been taught its importance, as opposed to the girls who are expected to let the men in their lives handle such masculine issues.

On the flip side, all this focus on financial literacy leads to men making much riskier investments, and thus falling behind the cautious and under-confident women investors, in the returns that they make, since markets tend to reward patience. But the difference is slight, and does not make up for the gigantic monetary advantage the men start with.

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In short, women earn less, aren’t taught how to invest, and are then labelled as frivolous for spending on the things society tells them to. Damned if you do and damned if you don’t, right?

Let us refocus our efforts ourselves instead, even if the magazines insist that we are the very epitome of frivolity. While controlling your spending is an important aspect of personal finance, it is only one side of the coin. Your income, or more specifically, how much of it you are able to save and invest, also known as your net worth, is the crucial number.

“Your net worth is more important a number than your income, expenses, investments, and savings all combined. You could be earning a crore a month, but still be doing terribly financially. On the flip side, even with a reasonable Rs. 30,000/- a month income, you could be on the way to retiring early because you have been saving up aggressively. Your net worth is the only figure that will tell you how your financial health is. Tracking it will tell you if you have done well or not over the month, and it will give you the motivation you need to do better. When you read it, it seems unnecessary. But words on paper do have power, and numbers on paper, even more so! Put your numbers down and give it a try. You have nothing to lose by doing so.”

So, let us cross the gender divide, from being branded the spenders to evolving into investors and beyond. After all, if you build up your net worth, you can be as silly as you wish with your money, without the extra dollop of guilt packed with it!

Priyanka Mashelkar is the Dy. Commissioner of Income Tax and author of 15 Sure-shot ways to Hit the Jackpot. The views expressed are the author's own. 

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