IWD 2021: Women And Their Relationship With Money

On International Women’s Day, CompareHero spoke to several women from different backgrounds to get a better sense of their attitude towards money and finance. 

In politics, the workplace, education and business, women are making strides, shattering glass ceilings, and changing attitudes about gender differences and equality. They have left their mark on all fronts. Globally, there’s been growing awareness and a continuous push to overturn traditional power structures and systems. According to the United Nations, 131 countries have added 274 gender-related reforms to laws and regulations over the past decade.

Despite this—and the fact that it has been over 40 years since the adoption of the Convention on all forms of Discrimination Against Women—women and girls still live in a world of widespread gender inequality with discrimination continuing to fester in law and practice.

According to the UN, it is estimated that more than 2.5 billion women and girls live in countries with at least one discriminatory law on the books. These statutes restrict women’s ability to make decisions about marriage, divorce, and child custody, and affect their choices of getting a job or starting a business.

It’s clear that a lot of work still needs to be done before women and men reach complete parity. According to the Global Gender Gap Report 2020, it will take another 100 years to achieve gender equality based on the current rate of progress—and efforts will need to be doubled due to the slowdown from the COVID-19 pandemic.

Closer to home, the same sentiment remains. Based on the latest data from the Department of Statistics Salaries & Wages Survey Report, the estimated median salary for females still lags behind their male counterparts, standing at RM 2,370 versus RM 2,477 for male. And that’s just one data point.

The UN’s 2030 Agenda (Sustainable Development Goal 5) aims to address the global issue of gender equality and to push the empowerment of all women and girls because gender inequality is not only a pressing moral and social issue but also a critical economic challenge.

But the tradeoffs to pushing for women’s causes will only make our country stronger. A McKinsey Global Institute report finds that RM49 trillion (US$12 trillion) could be added to global GDP by 2025 by advancing women’s equality. Similarly, a World Bank report states that our country’s income per capita could grow by 26.2%—implying an average annual income gain of RM 9,400 (US$2,250) if all economic barriers are removed for women in Malaysia.

Analysing Malaysian women’s financial literacy and inclusivity

Though personal finance data pertaining to women in Malaysia is quite scarce, several reports reveal interesting findings when assessing the relationship between women and money.

A 2012 Visa survey revealed that saving habits between men and women are almost equal, 47% and 46%, respectively in Malaysia. The overall results from the survey ranked Malaysian women 5th among 27 countries surveyed worldwide in regard to financial literacy. The overall country scoring was based on budgeting, emergency savings, frequency in talking to children about money, perception of young peoples’ money skills, and the desired age to begin formal personal finance lessons.

Likewise, 2017 data from UOB Malaysia revealed that financial inclusivity has improved for women as female credit card spend had grown at almost twice that of men’s since 2011. These data points show that women have increasingly used their credit cards to pay for basic necessities such as insurance, groceries and utilities; as well as the niceties such as travel and lifestyle shopping.

Though these data points shed some light—at least on the surface—of the relationship between women and money, there are other facets to money management as a female that may not be as clear from a report or a survey. And the reality is, women may approach and spend money differently from men, which ultimately affects these data points.

Here are just some CompareHero spoke to several women from different backgrounds to get a clearer sense of their attitude towards money and finance. 

On being engaged in financial literacy and planning

Traditionally, conventional wisdom would say that married women don’t participate much in their financial well-being, usually leaving it to the so-called “traditional breadwinner” or their spouses to take the lead instead.

But we’ve come a long way from those days. A 2019 USB report revealed that more than 80% of women globally are highly involved in their short-term finances, such as daily expenses, budgeting and cash flow. However, almost 60% of women still do not engage in the most important aspects of their financial well-being that involves investing, insurance, retirement and other long-term planning.

Dalena


Dalena, 27, an engineer, acknowledged that modernisation of society may have changed women’s attitude towards financial planning especially if they decide to marry later than what is typically considered the norm (30 ish). “Back in the olden days, women would move away from depending on their parents to depending on their husbands—the difference in today’s more progressive society is that now there’s a period of time in her life where she has to manage her own money, and so financial planning becomes a necessity at some point.”

“I do think there’s a difference between the financial planning of a man versus a woman. If both are planning to marry, the woman may think about financial independence—about helping out with household spending, but the man, however, would most likely think about actually supporting the family as the breadwinner,” she said. “With that said, I don’t manage my money as a woman. I manage my money as somebody who wants to retire early and in order to support a nice cushy lifestyle. If I ever get married, I’m hoping I could retire even earlier but I would still need to manage my, on my own, money now and moving forward.”

The environment could contribute to how women develop their general understanding of financial planning, according to Eugenie, a 30-year-old, Fintech Business Development Manager. “I think there are few factors that contribute to the financial planning’s mentality and behavior, one will be the industry that you are working in and another one will be your upbringing,” she said.

“People who are in financial related industries or roles generally have better understanding of financial planning. Besides, if your upbringing emphasised a lot on proper financial planning, most likely you will develop that mentality as well. My parents emphasised a lot about financial planning, hence I know about it as well,” Eugenie added.

Catherine Khoo


“In the past, women have not been planning their finances proactively as they rely on their spouse or parents but in recent years, I’ve seen in my line of work that most women have started to take charge of their own finances especially career women,” said Catherine Khoo, 52, a licensed financial planner of Principal Asset Management Bhd.

“Most married women would just want to plan something for the children and their own self for a comfortable retirement. As a married and a career woman, I take charge of my own finances by acquiring financial knowledge and put money into working according to my financial plan and review it regularly,” she added.

From her own observations, Nur Amirah, 29, a doctor working in the public sector, said she noticed that women, especially Asian women from traditional backgrounds, typically tend to hand over the financial responsibility to the males in the family.

“Not all women are blessed to be financially literate from an early age. So the father or husband or brother makes most of the decisions for the family including financial ones. Maybe we need to create more platforms for women to create more awareness on this from an early age. Schools may even consider starting financial management lessons,” she said.

On financial needs and wants, and how they differ to male counterparts

Although studies have dispel the theory that men are from Mars and women from Venus as one’s sex has little or no bearing on personality, cognition and leadership, some experts share that there still may be some slight differences in emotions, prefences and actions; so could it be possible that financial needs may differ between the two genders too?

When it comes to spending, females and male have been reported to operate differently. A 2007 study by the Wharton School of Business titled “Men Buy, Women Shop” found that women tend to view shopping as an activity, while men focus strictly on the goal. The men, who are more goal-oriented would go into a store, buy what they want, and get out as quickly as possible. But women, on the other hand, care more about the store environment and the attention they get from salespeople.

From her observation, Khoo said she’s noticed that there isn’t much difference in terms of the financial needs between the women and men—but she does notice that most men have more financial wants in their lifestyles than women.

“The financial needs are pretty similar between the men and women. They both need to think about their children’s education, a comfortable retirement, vacations etc. However, I noticed men have more financial wants and have different approaches to finances than women,” she said.

“Most men—not all—want a bigger car, a more spacious house, build a business, make charitable donations. It could also be that these men may be more willing to work and earn more money in order to enjoy more luxurious lifestyles,” she said.

Amirah


Though she doesn’t believe that the financial needs between a male and female have any major differences, Amirah said she does believe that women are naturally born with maternal instincts, no matter if they are single or married, and this affects their financial needs and wants.

“That may be the reason why when it comes to finances, I feel, we will usually focus on saving and investing our money for future plans very early on. We may also think about the cost of weddings, pregnancy, children’s education etc. earlier on as well” she said. “Our male counterparts, may be more focused on generating or investing money in general.”

“Also, as a woman, another big area that we may spend more than men is in healthcare—as a doctor, I’ve noticed women visit their doctors more often than men and also have a longer life span compared to them, and generally spend a lot more on healthcare. So I believe that having the proper insurance that caters to women’s healthcare needs is important. On top of that, typically women will also spend some money for skincare and general care—I make sure I reduce my other expenditure.”

On some of their biggest money challenges

Though all financial and money challenges for both women and men are similar across the board, general statistics do point out a few challenges that may be more unique to women.

From a salary and income perspective, the estimated median salary for a female still lags behind their male counterpart, standing at RM 2,370 versus RM 2,477 for male, based on the latest data from the Department of Statistics Salaries & Wages Survey Report.

“To me, generally worldwide, men have been making more money than women. The gender wage gap has always been something that feminists worldwide try to address, although not so much in Malaysia,” Amirah said.

Despite this, the impact of female contribution to the country’s GDP has been significant over the years. According to IMF analysis, the contribution of female employment to Malaysia’s economic growth has increased at a faster pace in recent years—on average from 4% from 2001 to 2008, of real GDP growth, to 14% from 2011 to 2016. In contrast, the contributions by male workers increased from about 7% of GDP to about 13% of GDP.

For Eugenie, she’s noticed real challenges to shattering the glass ceiling when it comes to climbing the corporate ladder in Malaysia. Women may also have to fork out extra expenses for feminine-related products as cosmetics have been traditionally more white collar.

Both Dalena and Amirah also believe that they and women in general tend to spend more than men—but only due to the additional necessities needed as a woman.

“We just generally have more needs than men. We spend more on undergarments, skincare, make up, menstrual care, healthcare, just to name a few. Hence, controlling our budget is definitely a challenge,” Amirah said.

“For me, my biggest challenge is that I do not have enough confidence—unlike men who may be more decisive—when I decide to take a risk (I’m more risk-averse), always second guessing that decision,” Dalena said.

As a financial advisor, a few of the common money challenges that Khoo has noticed among her female clients stem from three factors: their mindset, lack of financial knowledge and familial responsibilities.

“Some of my female clients let their spouse make the key financial decisions for them as they lack confidence and believe that they don’t have the ability to manage their money,” Khoo shared. I’ve also noticed that from my clients, generally, women may tend to have lower financial knowledge and skill than men because of the different priorities—Malaysian women typically assume the caregiver role and so will need to attend to family matters, which deprives them from getting involved in the financial matters.”

Khoo has also noticed that some of her female clients make less money versus her male clients, and they are more likely required to take off several months or years in order to be a caregiver for their children or elderly parents.

On investing as a stereotypically male-dominated field

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Investing has always been historically regarded as a male-dominated industry. Based on studies from 2016 and 2017, the micro-investing app Acorns found 57% of women don’t invest at all, versus 44% of men. But the advent of time has changed that. 

Though investing is traditionally regarded as a male-dominanted field, women may actually be better suited to taking the bull by the horns, according to Standard Chartered. According to their Emerging Affluent Study 2018, conducted across 11 countries, women are the ones that are leapfrogging up the social ladder, exceeding their parents at every level and successfully “supercharging” their fast track to financial independence.

Globally, 55% of this “supercharged” group are women, outstripping their male counterparts. These findings are consistent with research by Harvard Business Review, which revealed that women investors in Asia are increasingly generating their own wealth and are more assured of their financial literacy than their spouses.

“I do think that when it comes to investing, women may tend to take a more conservative approach and will generally do more research before deciding to commit to any form of investments,” Amirah said. “Even when it comes down to the actual asset classes, they also tend to be more conservative or risk averse with their money. Even for myself, 90% of my investments are safe investments.”

Amirah’s started learning, reading and actively participating in investing near the end of 2019. For her, she gained most of her investing knowledge and insights from peers in the industry and from social media, with Youtube as one of her main reference platforms. She recommends following Instagram accounts such as @her.duit  and @dearduit if you are looking for more female-centric financial and investing advice.

Dalena, who has been dabbling in ASB, robo-advisors and stocks say that she finds it’s way easier to talk about money and investment with women than with men. “Maybe because we’re in the same playing field. Guys who invest seem to be in a different league (at least the ones who advertise it) so it’s daunting to ask them questions. I learned mostly from googling online and talking to friends,” she said.

After more than a decade of working in the financial planning advisory scene, Khoo said she noticed gender parity in the field of investing in Malaysia, with the trend showing more female advisors entering the financial industry. “As a woman who continues to enjoy a rewarding career in the financial sector, I would strongly encourage those passionate women to enter the financial industry as it offers great flexibility so that you can manage both career and family well,” she said.

On any money management lessons received from their parents

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Teaching your child the importance of investing at an early age will hopefully empower them to start investing early too. 

Growing up, Amirah’s parents had played a pivotal role in her understanding of money and finance. Having a mother who was big on savings helped her understand the value of money really early on in life. Her parents, like many others, do not adhere to the traditional and stereotypical view that the husband is the more thrifty and financial-savvy of the two, and that the female counterpart is an extravagant spender.

“She has been financially prudent ever since her teens. She saved for her children as soon as we were able to open up a bank account. She did share with me some of her personal experiences with money, her ups and downs so that really taught me a thing or two about financial management. But we never spoke about how it was different being a female,” she said. “My father was not much of a saver and a little bit of a spender, since he was into technology so he would usually end up buying gadgets quite often. But both of them definitely gave me important lessons on money.”

Besides self-learning, Dalena acknowledges that her current understanding of personal finance and investing is in part due to the early exposure given to her by her parents. When she was younger, her mother had opened up savings accounts for her and her siblings while her dad had consistently deposited money into their accounts to help her and her siblings grow their savings.

“Now that I think about it, maybe this is where I got the idea that most of the time, men make the money, but it’s women who manage it. As a female, I guess seeing my mum divorced yet still have the means to retire relatively early, goes to show that even if you have somebody to support you, you still need to own a nest egg just in case,” she said.  “It’s almost like I got to see both sides of the coin. We didn’t splurge when I was growing up, but now we indulge ourselves and enjoy every minute of it. Taught me to appreciate money and what it can’t buy.”

Khoo’s humble beginnings had taught her the value and meaning of money too. Growing up in a poor family, Khoo’s father was a lorry driver who had to support a family of seven. It was these difficult moments that she’s grateful for as they taught her to be more vigilant and responsible when managing money.

“It was a tough life for me at that time as I needed to work during school holidays and weekends to help support my family when I was as young as 7 years old,” she said. “My parents were busy trying to make ends meet, especially my mother who sold some homemade ice-creams and cakes to neighbours and relatives. All of my siblings contributed equally to support the family.”

Related: Father’s Day 2020: 10 Ingenious Money Tips From Malaysian Dads

On their savings and retirement goals

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Secure your future by building a comprehensive retirement plan. 

The importance of retirement savings can’t be overstated. According to the Employees Provident Fund (EPF), 70% of Malaysians who withdrew their savings at age 55 use it up in less than 10 years. The big lesson here? Money is finite, so the earlier you build your savings, the longer time horizon you have to enjoy the capital gains and dividends.

Unfortunately, data also show that many Malaysians are still not contributing as much—as they ideally should—in building up their savings and retirement funds. According to data from the World Bank in its country report released in 2020, only 60.8% of working Malaysians are actively contributing their monthly income to the EPF. This is particularly true for those from the lower income bracket, and the rate is considered low even when compared to their peers globally.

The women we interviewed acknowledged the importance of building both a savings and a retirement fund with each woman taking proactive steps to grow their funds for a brighter future.

For Amirah, her goal is to save enough to have six to 12 months worth of savings. She also hopes to build a diverse investment portfolio that would allow her to retire before the age 50!

Through building her savings and continuously investing, Dalena said she hopes to eventually be able to afford moving away from her current practice (engineering) and into a completely different field, while still earning enough money on her own time.

Khoo said she saves at least 30% of her monthly income to fund her financial goals such as vacations, her children education fund, retirement and long-term care. “Though I have retired financially at the age of 45 with a fund worth RM5 million, I want to continue to help more people plan well for their financial goals. I also share these financial goals with my husband, and we review it from time to time.

On children as an investment

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If you decide to have little ones, be sure to create comprehensive financial plans for them too. 

Not all women—or men for that matter— and families decide to have kids in life, but if you decide to commit to the idea of building a family, Khoo suggests that every mother focus on several factors to ensure that they are able to build a happy and present family.

“I think the first important aspect before planning to have kids is to create economic stability in your life and family, as your expenses will increase. It’s very important to discuss the financial situation with your spouse to see if both of you are financially capable and stable to welcome a baby,” she said.

Her second tip is for families to consider and mull over whether the mother—and the father—are prepared to have a family. “Both of you need to assess and discuss if you are ready mentally, emotionally and physically to have kids.”

“Then you will also have to think about your job, and if it allows you to take a long maternity break or if you are moving towards a promotion in the job. And lastly, start saving for your children’s education fund—it may seem too early to start planning if you don’t have a child yet, but starting early has a lot of benefits especially for investment accounts that offer compound interest and less money is needed when you start early.”

On the importance of insurance (life and health)

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You will be your child’s role model, so protect your future to protect theirs. 

Your health is expensive. According to the National Health and Morbidity Survey (NHMS) 2019, Malaysians have been spending more on healthcare—or about 5.1% of their monthly household expenditure—than any other expense. This was an increase from 4.6% in 2015 and 3.6% in 2011, according to the public health survey by the Institute for Public Health (IKU).

To narrow it down further, only 55% of women have the financial ability to cover medical bills of RM2,500 while 67% could only afford RM1,000 for emergency expenses, according to a 2018 survey conducted by Malaysia’s Credit Counselling and Debt Management Agency (AKPK).

These figures clearly show that Malaysians still lack awareness on the importance of health and life insurance as a means to protect their own finances.

Amirah, a doctor serving in the public sector, stresses the importance for everyone to have insurance if they could afford one. “In Malaysia, it’s more for income protection than health insurance since the Malaysian healthcare system is one that is easily accessible to the public,” she said. “But if you could afford health insurance, having one is an advantage especially for women since we are at higher risks for certain conditions such as breast cancer, cervical cancer, ovarian cancer. Income protection is very important for both men and women, especially if you have commitments.”

Among her female clients, Khoo said she has noticed that females demonstrate more awareness and understanding on life, critical health insurance and income protection insurance, and are more likely to take action than men—and even more so when they have dependents.

“For single new earners, critical health and income protection insurance should be one of their first savings or investments to do. Generally, insurance companies consider women a higher risk than men because women tend to live longer, more likely to have chronic health conditions, tend to visit a doctor more frequently than men, and have babies. Also, women tend to feel more financial insecurity than men, hence they look for a financial safety net and a sense of peace of mind via insurance,” she added.

Lastly, the most important money lesson you’ve learned as a woman

“For me the most important lesson I’ve learned is that it’s okay to make financial mistakes. Women tend to be scared to make financial choices. That could be the reason why most of them leave the choices to the men—if they do,” Amirah said. “So we need to remind ourselves that it’s okay to start from zero, and it’s never too late. I feel that we need to let women feel empowered about their finances.”

Dalena said she realised that for her, the most important thing is to be aware of her impulses in regard to spending. “We have to be aware of it so that we don’t make big purchases based on that (our impulses). And of course, most importantly, not to rely on anyone to manage our finances,” she said.

Khoo said women have got to take charge of their own financial destiny by spending less than they make and invest their savings as early as possible. “Talk to a licensed financial planner and plan your finances early to achieve your financial goals, if you don’t have the financial knowledge, skills and discipline. A sound financial plan can be more important than a lifetime of work.”