Women are better budgeters but don’t realise it: how to boost your budgeting self-belief

Starling Bank has found men and women have different budgeting responses to the cost of living crisis, with women sticking to their budgets and men relying more on credit and loans. 

But new research by TotallyMoney also reveals the lack of credit card and loan options available to women compared to men.

Danielle Treharne of the Financial Inclusion Commission said: ”This goes beyond the gender pay gap and low levels of engagement with financial products mean women are left behind.”

Cash-strapped households are doing everything they can to cut back on spending, but new research by Starling Bank reveals gender differences have played a role in how individuals have responded.

Helen Bierton, Chief Banking Officer at Starling Bank said: “With women budgeting so diligently, they shouldn’t be reporting lower levels of confidence than men when it comes to their money, but they do. 

I believe it’s because there are systemic differences in how men and women are spoken to about money, how they are taught about money, and how much money they are given, which can alter both men's and women’s attitudes towards it.”

Budgeting self belief 

Why is gender playing a role in finances?

We might not like to hear it, but gender roles conventionally link money to men as that’s what the media feed us. 

Previous research by Starling Bank found in 2018 that 70% of financial media articles aimed at men portrayed ‘money making’ as a masculine ideal. 

Starling Bank put it down to attitudes towards money management and how men like to accumulate more money whereas women work with what they have. 

As a result, the study found 21% of women are more likely to downsize their lifestyle compared to 16% of men are 22% of women are eating into their savings compared to 15% of men.

The study conducted by Starling Bank with 2,000 adults in the UK were asked about money management during the cost of living crisis. Here’s what they found.

Whilst women might be better at budgeting when it comes to applying for a loan or credit card, TotallyMoney found women find it harder than men. Their data revealed: 

• Women receive higher credit card APRs than men (0.8 percentage points
• Women are given a 31% lower credit limit across all card accounts
• Lenders are 16% less likely to give women pre-approved credit card offers and women find they are eligible for 22% fewer credit cards than men 

Joint research by TotallyMoney and PwC also found that 10.7 million women do not have access to mainstream credit products affecting how confident they are about purchasing financial products. 

So the fact that women are less confident when it comes to their finances could be put down to the lack of products like credit cards, available to them. 

It is worth noting though that paying a credit card on time (payment behavior) makes up 48% of a credit score, and TotallyMoney research showed 27% more women missed paying on time than men.

Alastair Douglas, CEO of TotallyMoney said: “As it stands, the credit system is flawed. Half the population shouldn’t be struggling, and women shouldn’t be disproportionately disadvantaged. The financial services industry should be striving for equity, but in reality it’s struggling with transparency, and trust.

With that in mind, it’s important for women to know how to budget with what is available to them, especially during the rising cost of living. 

How to budget

If you are looking to give budgeting a go and don’t know where to start, here are some ways you can try. And don’t feel you need to start with big money, saving even pennies adds up in the long run. 

• Budgeting apps. Try out the best budgeting apps like Hyperjar or Emma, or saving apps like Chip or Plum which use artificial intelligence (AI) to calculate how much you can afford to put away into savings. If you’re looking to budget your money into different pots, the Starling Bank app lets you do this, but you need to be a Starling bank customer.
• Use the 50/30/20 rule. Try to follow this rule and put 50% on needs such as rent and other household bills, 30% on wants like hobbies and socialising and 20% on financial goals such as saving or investing. Check out our in-depth guide on how to budget with the 50/30/20 rule.
• Try the 1p challenge. If as part of your budgeting, you find you go off track easily or find it difficult to save, then this 1p challenge could be for you. The idea is, every day of the year you save an extra penny, so 1p on day 1, 2p on day 2 and so on. We’ve got a breakdown of how much you would put away per month if you did the 1p challenge this year.
• Give cash stuffing a go. Another great one if you’re a fan of budgeting physical cash. Some people prefer saving actual cash as visual budgeting helps them. This method involves separating money into different categories that fit your lifestyle, and putting money away in cash ‘envolopes’. Get the full low-down on how cash stuffing works and why the trend is popular on Tik Tok. 

Alastair Douglas, CEO of TotallyMoney adds: “Open Banking can help, and customers can leverage its power to better understand, and manage their own finances. It also provides lenders a more accurate, live view of somebody’s affordability.”