Women should have more access to finances and investment tools so that they can become financially independent, says Leila Maria Kehl Strategy Planning & Execution, Group Strategy Manager at the Berlin-headquartered N26, one of the fastest-growing digital banks in the world.
In an e-mail interview to Binndiya Das, Leila Kehl explains women, being the central figure in a family, is aware of the limitations in taking decisions regarding finances but they plan better than men in the matters of financial planning.
Once they achieve success, there will be no looking back and they can be role model for other women, she points out.
What are the main drivers behind the differences in saving and spending habits between men and women in the countries that were analysed?
Our data shows that on average, women have less disposable income at hand, and on average manage to save more than men. However, I believe that women are not naturally better or worse at saving but save more due to their current socio-economic role.
There are likely multiple explanations. Globally, women perform 75% of care work, 4 hours 25 minutes daily, more than three times than their male counterparts. Care work means caring and that often involves putting money aside for kids or your elders. Women could sense a higher personal financial risk which they mitigate through saving.
The motherhood penalty, unequal wealth distributions, and unpaid caregiving contribute to this financial risk. It is also possible that women decide to save in the traditional sense rather than to invest. Oftentimes, saving is publicly perceived as less risky.
Of course, this is problematic as in reality, there are methods of investment diversification which reduce the risk of investing significantly and which may be more financially beneficial for women.
The truth is likely a combination of these explanations and to change the status quo, I believe we need to give women around the world three things:
- Access to their finances
- Access to investment tools and
- Education on investment with clear female role models.
Do you think that the financial literacy of women in Europe plays a significant role in their saving and spending habits? How can financial literacy be improved among women?
According to a study entitled “Women and Investing,” a survey conducted by N26, overall, less than half of all women who invest (48%) consider themselves knowledgeable about investing compared to 59% of men.
If women feel they are not knowledgeable enough, it is because they lack the necessary education (although, according to New York Times, women know more about finance than is acknowledged).
In my life, I came across many unfounded beliefs, such as that women are not good with numbers or that men are better at anything to do with analytical and logical thinking. Fortunately, this thinking is changing, but we still have a long way to go.
To improve financial literacy among women, it is fundamental to expand access to information and resources. Promoting access to educational resources, especially those designed with women in mind, could help address unique challenges that would level the playing field.
Another way to address this issue is to Increase the number of female role models in the world of finance.
Role models matter. It is simple human behaviour: If you see someone like you making financial decisions, you will have greater confidence that you can do it yourself as well. In addition, it is also important to balance the representation of women and men at conferences and panel discussions on finance and investment topics.
How does the gender pay gap impact the savings and spending habits of women in Europe, and what can be done to address this issue?
Pay inequality limits the amount of money women have available to them and, therefore, their financial decisions.
Almost every woman I have met (as well as myself) has at some point, consciously or unconsciously, been at a gender disadvantage (both in work and personal life). The data supports that this is clearly a broader structural problem, which has certainly improved over time, but still requires our attention.
Fortunately, the European Parliament has just passed rules for greater transparency, with the aim of mitigating the gender pay gap.