Whether it's on clothes or cosmetics, women are always spending more than they should … right? Well no, not necessarily.
The idea that women often need a reality check when it comes to their spending habits is often not rooted in reality itself. It's just one of the many money misconceptions involving women that continue to persist in our society, even as we make more money and control more wealth than ever before.
But while the myth is simply that, other barriers that can hold women back in the financial world are real, like the continuing gender wage gap. Women make $0.82 for every dollar men make, according to an analysis from the Pew Research Center last year, dealing us an unavoidable wallet setback and men an advantage.
Still, these obstacles don't make other rumors about women and money more likely to be true. In fact, many of them have been debunked by The Washington Post columnist Michelle Singletary, such as the idea women are bad at salary negotiations and are too emotional to be money managers.
Dominique Broadway, the founder of financial education company Finances Demystified, spoke to Scripps News to further discuss why these are just myths.
Myth: Women are more likely to spend more money
Historically, people often say women are the spenders in the family — but Broadway says it's often the men who spend on more frivolous things, while women spend more on necessities. And reports from the Bureau of Labor Statistics, Deloitte Insights, Gitnux and Capitol One all match the personal finance expert's take.
The Bureau of Labor Statistics' 2021 Consumer Expenditure Survey showed single men spent an average of $2,365 more than women, spending more than double on alcoholic beverages plus higher averages on car and entertainment purchases. Women did spend just over $200 more on average on clothing (but I blame the TikTok trend cycle).
In comparison, male vs. female shopping statistics from Capital One show women do shop more than men, but 89% claim responsibility for daily household shopping compared to 41% of men. Plus, it found the average millennial male spends 59.9% more on clothes and shoes than his female counterpart.
Research from market data firm Gitnux echoes this, finding men more likely to make impulse purchases than women, with 54% compared to 45%. It also found women spent less on alcohol, footwear and electronics while spending more on groceries and personal care items.
Beyond regular spending, women also hold 55% of total student debt and owe 16% more than men at graduation, according to the Bureau of Labor Statistics. We also have to pay an average 20% more per year on out-of-pocket health costs, according to a recent report from Deloitte.
Broadway also pointed to the disproportionate number of single mothers in the U.S., which may contribute to higher spending amounts.
Myth: The gender pay gap can be attributed to women being bad at salary negotiations
As stated above, women are still making less than men, but it's not because we're "bad" at pushing for higher pay.
A report last year from the Pew Research Center found most Americans often accept the initial pay offer they're given, so it's not just a women's issue. It did find men were slightly more likely to ask for higher than offered, with 32% of men compared to 28% of women, yet women who did ask for higher pay were more likely — 38% vs. 31% of men — to still only receive what was initially offered to them.
Other research, published in the Academy of Management Discoveries in August, suggests women are more likely to ask for greater salaries, yet men are more likely to receive higher compensation.
The authors of that study say the perception that women don't ask for higher pay can increase gender stereotyping, potentially making it harder to address the true causes of the pay gap and to garner support for pay equity legislation.
The heightened awareness of this fact, though, could be attributed to women gaining better access to negotiation skills in recent years, according to both the researchers and Broadway.
"I think that we're seeing more and more women — especially with the increase of TikTok and Instagram — women are learning more strategies to start to negotiate," Broadway said. "I think the biggest issue is that women are still getting offered way less of a starting salary than their male counterparts, and so even if they do negotiate, they're still not getting anywhere near what their male counterparts are receiving."
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Myth: Women are worse than men at investing
Men are still overwhelmingly at the helm of Wall Street, but that doesn't mean women can't join the ranks — and rank higher than men.
According to a 2021 study from Fidelity Investments, more women are investing today than ever, and they're outperforming their male counterparts by 40 basis points, or .4%.
Broadway attributes this success to women's better ability to save, with Gitnux data showing 58% are savers compared to only 36% of men.
"We're a lot better with buying and holding and not necessarily always seeking quick returns," Broadway told Scripps News. "Often a lot of times with men, there's a little bit more pride, a little bit more ego, so we have actually been proven to be better at investing and actually trading as well."
An issue with this, though, is confidence in investing. Fidelity's data shows only 33% of women feel confident in their ability to make investment decisions, yet nearly 70% feel confident managing their household budget and checkbooks.
Some of this could be resolved through education, as 65% of women said they would be more likely to invest if they knew the clear steps to do so. But this curiosity does seem to be increasing, as Broadway said more than 20,000 women have gone through her financial wealth and trading program.
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