How gender, marital status, and gender norms affect savings goals

Abstract

Setting savings goals can increase wealth accumulation behaviour, yet it depends on how challenging the goals are. Using rarely available savings goal data from 1,760 clients of an advisory investment firm, we identify gender attitudinal differences in goal amounts: men choose more ambitious savings goals than women, independently from expected life‐long earnings. This, however, holds only for individuals living in a couple, for which men's savings goals reach the highest levels. Based on insights from qualitative research (56 semi‐structured interviews of 60 participants), we argue that these differences originate from gender‐normative roles assigned to members within the households. Most women are assigned to daily budget management, exacerbating worries about financial security issues in the short term and negatively impacting savings goals. This observation holds even when women, rather than men, manage long‐term investment for the household. Men's assignment to long‐term financial planning is related to optimism and ambition with regards to their savings goal choice, but these attitudes remain conditional on the fact that they do not deal with day‐to‐day budget management.

‘I had to take control’: gendered finance rationality in the UK

“…This behavior, while deviating from those expected of rational investors, should not be understood as irrational (bounded rationality [Strauss, 2008]) or not suitable for the complexity of the environment (environment-consistent rationality [Lavoie, 2015]) but are developed as a response to the normative context of social reproduction generally, and workplace pensions specifically. Interviewees find the inherent constraints in pensions as reasons for disengaging from them, especially since their responsibility for childcare, domestic chores and day-to-day budgeting leads to a desire for more accessible savings (Agunsoye et al, 2022). Gender-normative roles of the non-financial person (Enloe, 2013;Sent & van Staveren, 2019) are employed to justify the disengagement from pensions as it appears to take substantial effort to inform themselves about pensions which are not accessible when needed and where its in-built structural constraints would cause a disruption to pension savings when having children.…”

“…Because of expecting the occurrence of adverse events ('it's always worrying that I might need money' [Rita, low income]) emanating from gender-normative roles of being responsible for childcare, daily chores such as grocery shopping and dayto-day budgeting within the household (Agunsoye et al, 2022;D'Acunto et al, 2020), women want to be able to access money they have saved: 'I like to know where my money is and that I can get a hold of it when I need to get a hold of it' (Claudia, low income). The desire to remain flexible in case of short-term financial needs ('I didn't want anything, I couldn't access' [Layla, lower medium income]) stands in contrast to the lack of accessibility and flexibility inherent in workplace pensions.…”

Way of life: A future research agenda for how worldviews impact financial attitudes and behaviors

“…Lee and Hanna (2015) mapped the top saving goals listed by the survey of consumer finance (SCF) to the different levels of Maslow's hierarchy of needs and found that goals related to the human need for self-actualization and retirement/security had the strongest associations with savings behavior. Finally, prior literature has shown that savings goals do reflect subsequent savings behaviors (Agunsoye et al, 2022). Rohan (2000) acknowledged that defining "values" in academic research is difficult given that the word can be used in many different ways, both as a verb and a noun.…”

Examining Behavioural Aspects of Financial Decision Making: The Working Women Perspective

“…Most women are responsible for daily budget management, which exacerbates concerns about financial stability in the short term and has a detrimental influence on savings goals. It is found true even when women, rather than males, control the household's long-term investments [31]. As women are becoming more affluent in their financial decisionmaking, the need for personal finance planning increases.…”