We need to change the way we talk about finances with women. This is not a slight against our gender. I’m certainly not suggesting we lack the intelligence to comprehend personal finance. But women perceive and learn differently from men. In particular, research has shown that men prefer to learn independently, while women learn well in supportive, collaborative environments. Men are apt to charge ahead and learn while doing, whereas women prefer to stand back, listen, and observe. They want to read the manual, so to speak, before turning on the computer or launching the program.
The field of sociolinguistics, and more particularly, the work of Deborah Tannen, professor of linguistics at Georgetown University, shows that men are much more comfortable speaking in terms of “one-up” or “one-down.” They have an inherent need for competition and hierarchy in order to understand where they fit in the world. Women, on the other hand, are much more collaborative: they seek common experience and want to put themselves on the same emotional and intellectual plane as others.
The male need for hierarchy, for locating themselves in the pecking order, may explain why the language of personal finance—and most particularly that of investing, long dominated by men—is invariably put in terms of winning and losing. It may explain, too, why my male clients are more apt to evaluate investment performance in terms of benchmarks. They want to know if they have done better or worse than a given standard, such as the S&P 500 or the Dow, whereas female clients, when presented with investment results, are more apt to ask: “But what does this mean?” And they are not asking for that meaning to be measured in basis points.
Women are more contextual and less absolute than men. In my experience, they want the context for advice and find it easier when I preface my counsel, as I invariably do, with the phrase: “It depends.” It depends on your risk tolerance; it depends on your family situation; it depends on where you want to live.
My male clients are less patient with context and usually want more definitive, shorter answers. They want the bottom line. Men are the ones who, when asked by their wives or girlfriends if they look good in a certain dress, will simply answer “Sure” or “Nope.” Women know, of course, that the better answer begins with another question, such as: “What do you have to go with it?” or “Where do you plan to wear it?”
How can women’s preferences for commonality, context, and consensus be brought to bear on financial advice? The answer, I strongly believe, lies in circles, the process of women coming together with a common purpose. Throughout history, women have been attracted by the productive potential of circles. In colonial times, women gathered for sewing circles or quilting bees to assist in setting up the household of a couple about to be married or to have a child. Yesterday’s sewing circles and bees have evolved into today’s book clubs, recipe swaps, scrapbooking clubs, giving circles, and investment groups. The popularity of these groups among women is unquestioned and growing.
Learning about money in a community of women makes the work seem easier and even enjoyable. A circle setting where women come together to discuss the financial issues unique to them, such as living alone or coping with the negative financial consequences of divorce, is immensely empowering. It is also a safe place to discover one’s financial identity and to find answers to what women may fear are dumb questions. Through sharing and relating, women gain autonomy and knowledge to bridge the gap between their capacity and confidence.
Excerpted from Eleanor Blayney’s book Women’s Worth.
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