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Men vs. Women — Who’s Better With Money?

Lauren Monitz
Tired redhead guy lying on carpet and reading tax documents while his girlfriend listening to him and using laptop.

It’s no secret that a gender pay gap exists between men and women, but do men and women also handle their finances differently? Does how much you make play a role in how much you save versus how much you spend — and to what degree?

GOBankingRates surveyed 1,001 Americans across the country ages 18 and older to compare their annual income with how much they save, how much they splurge and how much they put toward necessities. The survey also looked at both genders’ common budgeting strategies to determine if men or women are better with money. Regardless of your gender, if you’re interested in learning how to make or save money — and how your fellow Americans are doing in comparison — read on.

57% of Women Earn Less Than $25,000 a Year, Compared With 45% of Men

According to the U.S. Census Bureau, the average American made $61,372 in 2017, but that doesn’t tell the whole story. Income varies drastically not only by gender but also by age, location and race. While the $0 to $24,999 salary bracket had by far the largest gender disparity of any range in the survey, only 2% of women earn more than $150,000 a year versus 6% of men.

It’s also concerning that men’s salaries, according to data from the Bureau of Labor Statistics, experience a steady uptick from the ages of 16 through 54, eventually reaching a peak average of $56,888 annually between the ages of 45 and 54. This contrasts significantly with women whose incomes peak around age 44 and never even reach an average annual wage of $50,000 per year — resulting in an extreme income gap over the course of a lifetime.

That said, the gender gap varies wildly by location. Of the 28 states where the gap is wider than the national average, Louisiana is by far the worst with a 31% differential, according to data from the Census Bureau. This means a woman working full-time in Louisiana makes 69% as much as the average full-time working male. California, meanwhile, has the smallest pay gap at 11%.

If those numbers shock you, they shouldn’t. Women are engaged in more than two-thirds of low-wage occupations, where many earn less than $11 an hour working as childcare workers, restaurant servers, maids and cashiers, among other jobs. Given that they earn less and therefore have less to work with, one might conclude that women are better with money simply because they have to be — after all, stretching a paycheck to make ends meet requires dutiful attention and adherence to one’s budget.

It’s not all bleak, though. The pay gap, while persistent, has narrowed over the past few decades. According to a Pew Research Center analysis, women earned 64 cents for every dollar a man earned in 1980, but that gap has since shrunk to 85 cents in 2018. The prospects are even better for younger women — those ages 25 to 34 earned only 11 cents less than their male counterparts did in 2018, compared to 33 cents less in 1980.

Men Are Less Likely to Follow a Budget Than Women but Use More Long-Term Saving Strategies 

According to the survey, 55% of women use some type of budget compared to 48% of men. These methods vary from advanced plans to more basic strategies like tracking spending via an app or clipping coupons while shopping. One popular method the survey looked at was the 50/30/20 method, which dictates 50% of your income after taxes should be put toward needs, 30% toward wants and 20% toward savings. Zero-based budgeting, another method listed in the survey, tracks all of your expenses for a set period of time.

A stricter system that also received responses — the envelope method — allocates a certain amount of funds each month to various buckets or “envelopes,” which forces you to consider the categories in which your spending is the heaviest.

While some of these budgeting tools are more effective than others, saving something is always better than saving nothing. Couponing is the most popular method for both genders, yet women are far more likely to do it than men. After that, men turn more often to the zero-based budget method, while women prefer to use money-saving apps.

An eye-catching number of respondents, however, claim they do not follow a budget at all; it was the most popular answer for both genders. While sticking to a budget doesn’t necessarily indicate whether or not a person is skilled with their money, the results here could indicate a general lack of understanding among Americans about how to properly manage their finances.

Women Save More — but Also Spend Slightly More — Than Men

For both men and women, the overwhelming majority put less than 10% of their monthly income toward savings. However, 29% of women claim they save more than 10% of their monthly income versus 21% of men. Both genders also put a large chunk toward necessities, with 26% of women and 27% of men saying they spend more than 50% of their monthly income on the essentials.

When it came to splurges, the numbers were also close, with the majority staying fairly conservative and spending less than 10% of their monthly income on them. Women came in a tad higher — 49% spend less than a tenth of their monthly income on splurges compared to 45% of men. One of the biggest outliers was in the over 50% range, with 4% of women and 3% of men putting a majority of their paychecks toward wants rather than needs. So, while women are often stereotyped as being bad with money, this data shows that women and men have similar financial habits — women being a bit more conscientious about saving and men a bit more frugal on spending.

How Both Men and Women Can Master Their Finances

The first step to mastering your money is to understand your financial situation — how much you make versus how much you spend. Once you have a baseline of your spending habits and behavior, create a budget you can live with and set some guidelines for yourself. The 50/30/20 rule is a good framework to follow, which outlines exactly what percentage of your salary you can save versus what to spend on necessities and nice-to-haves. If you’re looking to save even more, consider opening a money market account versus a savings account or putting your money into stocks, bonds, a 401k or an IRA.

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Chris Jennings contributed to the reporting for this article.

Methodology: GOBankingRates surveyed 1,001 Americans ages 18 and older between Aug. 14, 2019, and Sept. 3, 2019, asking five different questions: (1) What is your annual income before adjusting for income taxes?; (2) How much of your monthly income do you put toward savings?; (3) How much of your monthly income do you put toward necessities?; (4) How much of your monthly income do you put toward splurges?; and (5) Do you use any of the following budgeting strategies, tools or methods? Each survey participant had to answer “No” to the following screener question to qualify: Do you share finances with a partner (e.g., a joint checking account)? GOBankingRates used Survata’s survey platform to conduct the poll. This survey was conducted Aug. 14, 2019, to Sept. 3, 2019.

This article originally appeared on GOBankingRates.com: Men vs. Women — Who’s Better With Money?