Women and money: score higher on average on financial literacy

Reading time: 6 minutes

Do you think men are automatically better with money? New research among 310 professionals in Nairobi shows otherwise. On average, women scored higher on financial literacy than men, even though men knew more about interest and investing. How is that possible? Women turned out to be better at saving, budgeting, and planning ahead. In this blog, you will read what this research means for your own finances and what concrete steps you can take to strengthen your financial knowledge and behavior.

What is financial literacy?

Financial literacy is not just about knowledge of interest or investing. It consists of three components:

• Financial knowledge: do you understand how interest, inflation, and risk work?
• Financial behavior: do you budget, save, and pay bills on time?
• Financial attitude: do you prefer to spend money today, or save for later?

The Organisation for Economic Cooperation and Development (OECD) uses this three-part division to measure how well people worldwide handle money. And that yielded a surprising result in a study among professionals in Nairobi, Kenya.

What did the researchers discover?

Researchers from the University of Hertfordshire surveyed 310 professionals in Nairobi about their knowledge, behavior, and attitude regarding money. The outcome was striking.

Women scored higher on average on financial literacy.

Women achieved an average of 77 points out of 100, men 76 points. The difference is small, but the reason behind it is interesting. Women actually scored lower on financial knowledge than men (79 versus 83 points), but that difference was more than compensated for by their financial behavior and financial attitude.

Women save more and are less likely to give in to impulse spending

In the financial attitude category, women scored significantly higher: 71 points compared to 64 for men. Women find spending money less satisfying than saving and are less likely to live day by day without thinking about the future. Women also performed slightly better on financial behavior, such as budgeting and saving.

Men invest more often in risky products

Women more often choose savings accounts, money market funds, and government bonds. Men, on the other hand, invest more often in riskier options such as crypto. Of all participants who invested in crypto, 65% were men.

Women are quicker to doubt their own financial knowledge

Another striking point: when faced with open-ended questions about interest, women chose the answer "I don't know" much more often than men. 81% of all incorrect answers to such a question came from women, mostly because they indicated they did not know the answer rather than guessing.

Moreover, men more often overestimate their own knowledge: 59% of men described their own financial knowledge as "high" or "very high," compared to only 30% of women. Yet the results actually showed that women performed at least as well.

This is an important insight. Research into financial literacy that only asks knowledge-based questions may give a distorted picture of how well women really handle money.

What can you do with this?

Whether you recognize that you are quick to say "I don't know" when faced with money questions, or that you invest a bit too confidently: this research provides practical starting points.

For those who doubt their own financial knowledge

• Assume that you know more than you think. Good financial behavior, such as saving and budgeting, counts at least as much as exact knowledge of interest rates.
• Just calculate it. Don't know exactly how compound interest works? Practice with it. It is a skill, not an innate talent.
• Ask follow-up questions instead of guessing or giving up. When in doubt, looking things up or asking is always better than skipping a question.

For those seeking out risk

• Check your risk diversification. Do you invest primarily in one type of product, such as crypto? Consider diversifying across different types of investments.
• Combine self-confidence with knowledge. Do you feel confident about your financial choices? Regularly test that confidence against facts, not feelings.

For everyone

• Build a solid foundation first. Before you start investing, it is smart to have your finances in order.
• Think beyond today. A good financial attitude, such as saving for the long term, is at least as valuable as exact knowledge.

Why this research is also relevant in other countries

This research was conducted in Kenya, but the pattern is recognizable in many countries. Women often accrue less pension than men, partly due to fewer working hours and less investment. That difference grows into a significant pension gap later in life.

In conclusion

Financial literacy is more than knowing how interest works. It is just as much about what you do with your money on a daily basis and how you view the future. Strong habits, such as budgeting and conscious saving, can more than compensate for knowledge gaps.

Do you want to strengthen your financial knowledge and habits at the same time? Check out our blogs on money management and the money management category in the webshop for practical tools to get started today.

FAQ on financial knowledge

Are women more financially literate than men?

This study among 310 professionals in Nairobi showed that women scored slightly higher on average on total financial literacy than men (77 versus 76 points), although this difference was not statistically significant. However, women scored significantly higher on financial attitude.

Why do men score higher on financial knowledge?

In this study, men achieved higher average scores on knowledge questions regarding interest and inflation. Part of this difference is because women answered "I don't know" more often to open-ended questions, possibly due to doubts about their own knowledge, not necessarily due to a lack of knowledge.

What is the difference between financial knowledge, behavior, and attitude?

Financial knowledge concerns understanding concepts such as interest and risk. Financial behavior concerns concrete actions, such as budgeting and saving. Financial attitude concerns your mindset regarding money, such as the tendency to save for the future rather than spending now.

Do men invest more riskily than women?

Yes, this study showed that men invested more often in risky products such as crypto, while women more often chose savings accounts, money market funds, and government bonds.

Author: Written by Lifestyle Habits, specializing in practical money management, personal development, and healthy lifestyle habits.

Disclaimer: The content of Lifestyle Habits is intended solely for general educational and informational purposes. No rights may be derived from the content. It does not contain financial advice or recommendations. Investing involves risks, including the loss of (part of) your investment. Past performance is no guarantee of future results. Always do your own research before making financial decisions.