"The overarching finding is that women’s relationship with money is driven by personal life experience.Unless financial information acknowledges and understands this, it will not readily affect this relationship. Fundamentally, gender is pivotal in all areas of providing financial information, programs and products.
For women, emotion, money and family were interwoven. Women felt overwhelmed by what they did not know and embarrassed when they discovered what they had foregone, or that
they had wasted opportunities to become financially literate. The feelings of hopelessness, shame and inadequacy in their finances ran deep across all socio-economic groups.
Women in the study were generally fearful about money. Their lack of financial literacy was a frightening prospect, and many found the language of money to be frightening. Many women in this study did not have either the first hand experience or the ready access to information to make informed decisions. They also lacked confidence and knowledge on how to go about accessing the financial market.
The research found a number of factors influenced the perception of money, including family, class and financial status, and considerations of the ‘privacy of money’.
Besides emotional and social factors, the research identified additional influences on women’s financial behaviour, especially with regard to taking control of finances. Most particular among these was the importance of significant life changes – new employment, divorce or separation, death – in stimulating learning and control for women.
These are often negative events, and extremely stressful stimulators to action. Women too, have a need for money to be ‘visible’, and property is seen as a preferred investment option for many.
• information about a range of topics, including managing money and assets like banking, investments, credit, insurance and taxes
• understanding how financial concepts work,such as the relationship between time and rates,and aggregating assets in insurance
• confidence to plan and to make financial decisions"
The study is interesting and, while it does concentrate on women's issues, the topic of financial literacy probably affects men equally - even if their perceptions are different.
Having just gone through the electoral process, where the economy was high on the agenda, I wonder how much a change in money behaviour could change the economic fortunes of the entire nation?
New Zealanders have amongst the worst savings record in the world. Our personal debt by household is astonishingly high - according to the NZ Reserve Bank "By mid-2006 the outstanding debt of households had increased around five times in dollar terms since 1990, more than doubling as a percentage of households' disposable income." While that might be comparable to the UK, USA and Australia - I don't think we can take reassurance from the fact.
When I think about the positive effects of micro loans given to women in developing countries where the women are discriminated against, effectively denied access to capital - sometimes because their status is that of a minor- I wonder what impact on New Zealand's economy if we could stimulate a far greater understanding of money and how it can work positively to change lives.
Interestingly, one of the criticism of micro-financing has been that it 'privatises public safety-net programs' - but that perspective comes from a highly command and control position - where self determination is seen as less noble than a charitable deed or handout. Handouts are fine, but they encourage dependency. I wonder if financial ignorance in New Zealand has come from just that kind of reliance on welfare state thinking? If one knows there is a regular trickle of assistance, what point is there in imagining that it could be used to grow income or wealth (when the state subsidy reduces or is eliminated if the individual's income increases. It is a cycle of dependency where knowing more about money and personal investment is suppressed by the welfare system. A little extra cash becomes a dangerous thing - if it will kill the golden goose.
I'd like to see a grass-roots programme put in place - or begun spontaneously by women who choose to take responsibility for themselves and their families - maybe some money clubs? Where the topic of discussion and action is to build wealth from the ground up - it could begin with absolute basics and progress through to entrepreneurship.
The funny thing about all of this is that it reminds me of the Swedish economists who wrote Funky Business Forever: How to Enjoy Capitalism (Financial Times)
- they said Marx was right - the proletariat does own the means of production, its just that, somewhere along the way, the old boss got replaced by the new boss. Today individuals and their talents are far more valued by being able to make unregulated/disintermediated connections with like minds. Imagine a revolution of women who end up controlling significant wealth from a low base. Now that would be something to see.
If you are interested, check out Moneytopia