Women have stronger money management skills than men in areas such as everyday financing and planning but struggle around more complex financial concepts, according to results of the latest MasterCard survey on Consumer Purchasing Priorities-Money Management.
Respondents across seven Asia-Pacific markets were questioned on their ability to handle everyday budgeting; keeping track of expenses; paying bills on time; knowledge of compound interest, and whether paying minimum amounts on unstructured loans such as credit cards was a good idea.
The survey polled consumers on various aspects of financial literacy such as their basic money management skills, investment knowledge and financial planning. It was conducted from March 15 to April 27, 2011 and involved 4,359 consumers from the seven markets. Data collection was via internet surveys, personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The survey and its accompanying reports do not represent MasterCard financial performance.
The MasterCard survey showed women scored better than men in most markets when it came to tracking expenses regularly, but trailed when it came to understanding investments and inflation compared to their male counterparts.
Results showed that both men and women were adept at budgeting for their everyday finances — eight out of 10 respondents overall said they could handle budgeting. The survey also found that women believed it unwise to only pay the minimum amount for unsecured loan facilities such as credit cards, led by New Zealand (76 percent women vs 73 percent men) and Hong Kong (76 percent women vs 66 percent men).
Survey findings revealed a generally weak understanding of the concept of compound interest across most markets, with the exception of Chinese women who had the highest score (47 percent), followed by Chinese men (37 percent), and Japanese respondents (men 33 percent, women 30 percent). Women were found to be more money conscious and better at keeping track of their spending more regularly than men. Women in both Australia and New Zealand (76 percent of respondents) were especially systematic account keepers.
Women also edged ahead of men in their prudence, with Taiwanese women leading in regular savings (96 percent women vs 92 percent men) and the belief in having 3 to 6 months’ emergency cash savings. In a majority of the markets surveyed, women also showed up as being more financially prepared in taking out insurance for anything unexpected, led by Taiwan (92 percent women vs 89 percent men).
Survey questions about more complex financial concepts — such as understanding inflation or investment — favored men, with a significant proportion of women unable to answer or answering incorrectly when questioned about the concept of inflation. In Japan, 65 percent of the women did not know the answer or answered incorrectly, compared with 49 percent of men, with Australia a close second from the bottom (63 percent women vs 49 percent men).
Similarly, women did not have a clear understanding of whether single company stocks provide safer returns than a diversified stock portfolio. Across seven markets surveyed, on average 63 percent said they did not know or answer incorrectly on whether a single company stock portfolio was better than a diversified one compared to 57 percent for men.
Georgette Tan, vice president, communications, Asia-Pacific, Middle East and Africa, MasterCard Worldwide, said it is very encouraging to see that women have a good understanding of how to manage everyday finances, and are responsibly thinking about finances for the future.
“However, the fact that they still do not have a clear grasp of inflation or investments might affect how prepared they are for the future,” she said. -Daily Tribune
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