How Men and Women Think Differently About Money

When I get a massage, as I do periodically, I like to park my brain in neutral and bask in the serenity. So imagine the jolt when, a few months ago, my massage therapist wanted to spend our hour talking—about Social Security. A divorced woman in her fifties, she had heard that she could apply for Social Security on her former husband’s record. Was that true, she wanted to know, and if so, would it have any effect on her ex-spouse’s own Social Security benefit?

So instead of parking my brain in neutral, I had to shift into overdrive to explain the nuances of Social Security (yes, if her marriage had lasted 10 years, she could apply for benefits on her husband’s record once she’s 62, and no, it wouldn’t affect his Social Security). So much for my peaceful massage.

A few weeks later, I sat down for my regular haircut, assuming I could zone out while my stylist snipped away. But she wanted to talk—about her retirement plan. She thought that as a self-employed person she could sock away much more than she could in a traditional IRA, but she was hesitant to raise the subject with her accountant. I confirmed that she was probably eligible for a Simplified Employee Pension or individual 401(k), and that triggered a discussion about retirement investments that lasted as long as my haircut.

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It occurred to me later that both women were in tune with the Kiplinger’s subscribers we surveyed earlier this year to learn more about how they invest. When we asked where they learn about personal finance, women were more likely than men to say that they talk to friends and family or ask questions of a financial adviser—or, in some cases, a client who happens to be the editor of a personal finance magazine.

That’s just one of a number of ways in which men and women differ in their attitudes toward money. After we published our April cover story on the secrets of women investors, I had a lively exchange with a few of our male readers, who wondered why we write occasional stories geared toward women. After all, they pointed out, financial products are gender neutral. “Let financial advice stand on its own merits,” wrote Al Oxley of Kalamazoo, Mich.

I totally agree. But women often use financial products in different ways than men because they take a different approach or find themselves in different circumstances. For example, as we reported in April, women tend to trade stocks less often than men—and they get better returns. In our special report on women and money in the June issue, we focused on the fact that women tend to live longer than men, which leads to worries about making their money last and paying for health care as they age.

Our reporting also turned up evidence that men and women even speak a different language when it comes to money. Annamaria Lusardi, director of the Global Financial Literacy Excellence Center at the George Washington University School of Business, says her research shows that jargon and technical terms are more off-putting to women. In teaching her own classes, Lusardi consciously starts with plain English and “builds the language of finance.”

Starting this month, we’re going to follow up our series of stories with a regular column that addresses—in plain English—the financial concerns of women. But like all of our stories, this column will stand on its own merits and have practical applications for men, too. For example, men who read the special report in our June issue learned a lot about maxing out retirement savings, leaving a legacy and paying for health care in retirement. And we hope they have shared that knowledge with the women in their lives.

My mantra has always been that men and women working together make a socko combination, and we want to make sure that each partner feels comfortable with the challenge.