The insomnia gender gap
Survey findings show women earn less but worry more, for reasons including lower pay and higher costs.
Just over a third of women have lost sleep through worrying about money in the past year, compared with just over a quarter of men. That’s one of the findings of a 2000-person survey by the Commission for Financial Capability (CFFC), indicating that women are on the wrong side of an anxiety gender gap when it comes to money.
Women were far more likely than men to admit they were ‘‘stressed’’ about their money situation (53 per cent versus 38 per cent).
The CFFC also found women more likely to say they had missed out on important healthcare, healthy food, and social activities as a result of not having enough money.
For example, 36 per cent of women had forgone medical treatment because of the state of their finances, compared with 25 per cent of men.
They were also more likely to conceal the state of their finances from their friends – 23 per cent said they had lied about the health of their finances, compared with 15 per cent of men.
PURSE STRINGS
Hannah McQueen, who runs financial fitness company EnableMe, believes one factor is that women are generally the ones paying the household bills.
‘‘Women manage the majority of the finances, so they are definitely at the forefront of the financial reality for most families.’’
Financial adviser Liz Koh said women were still on the wrong side of the pay gap, which could be having an effect.
In 2017, the gender pay divide was about 12 per cent. The same year a Ministry for Women report concluded that differences in education, occupational preferences, and a preference for part-time work were responsible for 20 per cent of the gap, and the rest was ‘‘unexplained’’.
Higher living costs were another issue. Koh said that when she helped couples do budgets, women invariably had higher ‘‘pocket money’’ allowances in relationships than their male partners.
Social conventions have traditionally led to women’s wardrobes being more extensive than men’s, and they have had to pay more for haircuts, cosmetics and toiletries. ‘‘Women’s haircuts are about three times the price of men’s,’’ Koh said.
‘‘Women manage the majority of the [household] finances, so they are definitely at the forefront of the financial reality for most families.’’
Hannah McQueen of EnableMe
LOWER SAVINGS
The gender pay gap had led to women’s KiwiSaver balances being on average smaller than men’s, ANZ reported.
‘‘Our data tells us that average balances for female members in the ANZ KiwiSaver scheme were almost 19 per cent lower than men’s,’’ the bank said, and the gap was widening, as year-onyear compounding of investment returns magnified the effect.
‘‘We estimate that a 25-year-old woman today is, on average, likely to retire with $144,000, compared to $223,000 for a 25-year-old man,’’ ANZ concluded.
It also reported that women were more likely to have their KiwiSaver money invested in lowerrisk, lower-return conservative funds.
In general, women tended to retire two years earlier than men, and also lived longer.
This wouldn’t necessarily matter for women in stable relationships, as KiwiSaver is relationship property, and so should be divided fairly should a couple split. But McQueen said: ‘‘When you divorce, the female predominantly takes the negative financial position, if there was one.’’
RISK AVERSION
Some believe inherent biological differences lead women to behave differently with money.
Koh said: ‘‘I’m speaking very generally, but men are not so risk-averse as women, which leads them to worry less about the longer term.’’
But the popular idea that women are inherently more risk-averse when it comes to investing has been challenged in recent years.
Maddy Morgan, a professor of feminist psychology at Massey University, said ‘‘sexual difference research’’ often resulted in highly fallacious statistics.
Compare the risk aversion of highly paid, equally financially literate male and female economists, and you might well find no difference at all, Morgan said.
Research that did not control for societal factors, such as the proportion of women being financially controlled by dominating male partners, or differences between generations, could also result in misleading conclusions being drawn.
In general, sexual difference research also tended to miss a crucial point. ‘‘The differences within the two groups are bigger than the differences between them,’’ she said.
FINANCIAL LITERACY
Women also scored on average lower than men in financial literacy in New Zealand research. Being the ones to pay the bills did not mean women were financially literate, McQueen said.
There’s nothing inherent about the acquisition of knowledge. By and large well-educated, wellpaid men have developed the language, processes and culture of banks, insurers and fund managers, though that is changing as women are taking an increasing number of roles within financial services companies.
In 2016, the Britain Thinks agency conducted research for the Financial Times which found typical responses by women to the investment industry were ‘‘unwelcoming’’, ‘‘patronising’’, ‘‘male-dominated’’, ‘‘complicated’’ and ‘‘full of jargon’’.
Theory aside, the most pressing question for women is how to reduce their financial worries.
McQueen had this advice: ‘‘You need to unpack why you are worried; if it’s because you don’t have a plan, you don’t have enough money, you’re not sorted for retirement.’’
Other factors such as a partner’s approach to money, or their kids having a sense of entitlement, can also be contributing factors in a failure to make progress with money.
The problem could be an abusive, controlling partner, Morgan said.
Only when people had faced up to the things holding them back could they make plans to get on the financial track they desired, McQueen believed.
Beating back the welter of worry required evidence of making headway. ‘‘What causes stress is a lack of progress,’’ she said.