Sex and Money

Men and women deal with their finances differently. There are no surprises there. New qualitative research conducted by Professor Roslyn Russell at RMIT University in Melbourne has explored why women make the financial decisions they do. Professor Russell discovered the major factors behind most decisions for women were family and relationships. It’s no different when a woman is single or in a relationship without children, she still puts the same factors first.

So how does this relate to the home loan market? As you will discover below, women see buying a home as security, ticking the box of providing stability. It’s a good opportunity to use this research to understand how and why women buy.

Here’s what Professor Russell had to share with Loan Market about her research.

What do you believe is the driving force behind women's financial decisions?
From our research we found the strongest force is relationships, family and children. The demands of looking after the family or maintaining a relationship was paramount in the priority women placed in making financial decisions.

Is it the same for single women, women in de facto relationships as well as women married with children?
It isn't always the same circumstance, but the underlying factors that relationships are important and not separate to financial decisions, seems to apply. We noticed with single women that friendship or social circles were important in the financial decisions they made - for example if friends were buying apartments as investments then that was an important factor in their decision to do the same.

What role does gender play in relation to big decisions like buying a home?
Having a home is important to women as it represents security and a place to care for their families. Again, with single women, there was a trend for single women to invest in units - they saw it as security. Incentives like the first home buyers grant have been instrumental in these trends. In fact, this year has been the first time when women outnumbered males in buying property.

Big decision making is an area that women, in the past, have tended to hand over to their partner. Does this look like changing?
I’m not sure - it’s not as clear cut as 'handing over' big decisions. Most women would think that big decisions were shared. But it did seem they would go along with decisions their partner wanted, in order to demonstrate trust and commitment to the relationship. It’s not that they disagreed with the decisions, but perhaps haven't protected themselves sufficiently in the decisions.

Some of the baby boomer women had been burned by trusting husbands or partners in the past but most of the younger women hadn't experienced as much family breakdown (yet) and were quite adamant this wouldn't happen to them.

Some of the younger women earned more than their partners and didn't feel vulnerable financially at all. The main issue isn’t the decisions the partner makes that are wrong, but that women feel that finances and trust/love go together. If the trust is misplaced then there is more at stake than just a broken heart.

Financial literacy is important. But are there any other ways women can help their own situation?
Yes, our research tends to suggest that by actually being involved and taking an active interest in finances will lead to greater levels of financial literacy - it isn't always the reverse. Research, talking to other women, and making finances a common topic among friends would help bring issues into the light and give women the awareness they aren’t the only ones facing difficult financial decisions. If women make it the norm to understand their whole financial situation - with or without a partner, rather than the norm being to deal with day-to-day budgeting only, would also help.