Are women taking more chances with their money?

The feminist revolution made big waves in the 1960’s following women’s emancipation and growing role in the workforce. However, albeit the passing of more than 60 years, women in the 21st century are still suffering from economic, social and cultural gaps that carry political, economic and social repercussions.

One of these gaps is the financial gap; it is a well-known fact that women are still making less money than their male counterparts for the same type of work, but a less known fact that women’s attitude towards money and the way they manage their savings also differs from men’s.

While women are more likely to budget and save, they are less likely to take financial risks. In this day and age, when the economic system of the western world is highly dependent on wise investments and knowledge of the stock market, this trait serves to further widen the gap between the sexes and delay women’s full financial liberation.

Image courtesy of stockimages at
Image courtesy of stockimages at

The following reasons have attempted to explain this specific difference in gender behaviour:

 Economic explanation:

Women’s tendencies to be more careful with their money are a result of economic factors; they usually receive lower salaries than men and in general make less money and therefore are more unlikely to take chances with it.

This claim is backed up by research showing that high earning women were found to be more likely than other woman to put their money in the stock market.

The reason, according to this explanation, is therefore due to economic circumstances rather than biological reasons or cultural upbringings.

 Biological explanation:


This claim rests on the different levels of testosterone found in women and men. Testosterone is a hormone found in high levels in males and is associated with risky behavior, aggression and violence.

Studies have shown that women with higher level of testosterone are more likely to take financial risks than women with lower levels; one research done on this subjected tested more than 500 MBA students – males and females – and asked them to choose between a fixed and guaranteed cash reward and a risk lottery with a higher potential payout.

The results were fascinating. More men chose the risky lottery than women, while women with higher levels of testosterone were almost seven times more likely to choose the same risky lottery than women with lower levels.

Cultural and Psychological Explanations:

The cultural theory is based on the social orientation of most patriarchal societies that encourages boys from childhood to be competitive and to take risks while encouraging girls to be passive and compliant.

This theory is backed up by findings from research done in matrilineal societies, where women were actually found to be as competitive as their male peers.

Thus, society and cultural upbringing plays a role in determining the level of risk-taking men or women will have in adulthood.

On the other hand, psychologists also stress the importance of the environment girls grow up in. They claim that when girls are put in a co-ed environment, they feel more pressure to adhere to the gender expectations of their sex and thus hold back their competitive behavior (i.e., a more attractive girl is someone who is less competitive and makes less risky choices).

These psychologists claim that when put in an all-girl environment, girls are more likely to be as competitive as boys.

Image courtesy of David Castillo Dominici at
Image courtesy of David Castillo Dominici at

This claim was proven correct as a result of an experiment done in the UK on adolescents to determine the differences and similarities in boys and girls’ level of risk-taking when sorted into 3 groups – all boys, all girls, and mixed.

Each group member was asked to choose between a fixed payment or a high stakes gamble with a higher value potential. The experiment showed that girls were more likely to choose the gamble when assigned to an all-girl group. Moreover, girls from single sex schools who were allocated to the mixed group also showed the same tendency.

A recent study on the gambling habits of women also showed this finding to be true in adulthood; women are more drawn to games of chance that are inherently based on social and chat features and maintain a large female presence like bingo, unlike men who are more drawn to casino games that are geared towards granting the gamer a more thrilling or adrenaline-rush experience.

Lately more women are trying out their luck in online poker since an online environment takes away from the more male dominated atmosphere found in most poker games in land based casinos, which also corresponds to the findings that women are more likely to take risks in a less male-dominated environment.

In conclusion, it seems like most women are still hesitant to take risks with money because of cultural, economic, and biological reasons.

However, they are more likely to take risks when put in an all-female environment, or when the environment they operate in isn’t dominated by a large male presence.

These findings serve to give insight on what can be done to ensure that women fulfill their potential in the 21st century society that is still, to an extent, largely dominated by men.

About Dana Torres

Born and raised in Israel with a ten year interval in New York, Dana considers both places her home. She first made the choice to commit to a frugal life when she signed up for a degree in the Humanities. Today she loves nothing more than to share her newly learned skills and experience in thrifty living with others.

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