Is Gender a Matter When It Comes to Financial Literacy

Financial literacy is defined as “the ability of people to make financial decisions in their own best short- and long-term interests” (Bruce Ian Carlin & David T. Robinson, 2010). In other words, financial literacy initiatives provide the necessary knowledge, skills and tools for consumers to make informed financial decisions with confidence. Standards and benchmarks need to be established to enable the accurate assessment of financial literacy as opposed to personal financial knowledge (SuzanneP.Wagland & Sharon Taylor, 2009). This research is to study is there any matter when we put the gender and the financial literacy together? To be honest, men and women have different attitudes and performances to financial literacy.

Many previous research have done relevant research. The British chief neuropsychologist Roan Briengdan had pointed out that there is a big difference between the men brain and the women brain. Gender has been claimed to be a significant variable affecting the level of individual financial literacy. Some research findings have suggested that women are more risk-averse than men; less confident when making financial decisions, and less knowledgeable in terms of financial literacy (Suzanne P.

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Wagland & Sharon Taylor, 2009). Therefore, the purpose to study financial literacy between men and women is to investigate is gender is one of the matter when it comes to financial literacy.

Most of the previous research are evidence that gender is a matter in financial literacy. Gender differences remain statistically, significant after controlling for other factors such as participants' major, class rank, work experience and age (Haiyang Chen & Ronals P.

Volpe, 2002). Previous research evidence that women generally have less enthusiasm, lower confidence, and less willingness to learn about men and women (Haiyang Chen & Ronals P. Volpe, 2002). The previous research suggest that women have less confidence than men and that this may explain why men are more financially knowledge than women. By deduction, a lack of financial knowledge, confidence and a reluctance to take risk are factors likely to impact on women’s financial ability. However, another possible reason for the lack of confidence and risk taking displayed by women n financial skills may due to their traditional role. Women as part of society, undertake homemaker and carer duties (SuzanneP.Wagland & Sharon Taylor, 2009). In the past, we often heard that men are more rationally, and women are more emotional. Since ancient times, there has been a men sovereignty. Therefore, there are a lot of decisions, things are controlled by men, and women can only obey, but now they have begun to step towards equality between men and women because many women think that this is a kind of discrimination, which is considered to be a kind of unrespect.

Haiyang Chen & Ronals P. Volpe (2002) linked risk taking and confidence as conribuors to gender differences in financial literacy. Similarly, Haiyang Chen & Ronals P. Volpe (2002), Vickie L. Bajtelsmit & Alexandra Bernasek (1996) reported that women were more risk adverse than men (Vickie L. Bajtelsmit & Alexandra Bernasek, 1996). Conversely, Renate Schubert, Martin Brown, Matthias Gysler, & Hans Wolfgang Brachinger (1999) stated that under controlled economic conditions, female subjects do not generally make less risky financial choices than male subjects ( Renate Schubert, Martin Brown, Matthias Gysler, & Hans Wolfgang Brachinger, 1999).Therefore, these research verify that women were more risk adverse than men, men are more dominant in financial literacy because of the attitude and also condition.

The British chief neuropsychologist pointed out that there is a big difference between the men brain and the women brain. He summed up several differences between men and women's brains. For example, the brain of a men is bigger than a women. On average, the men brain is 8% to 10% larger than the women brain. The size of certain areas of the brain is also different between men and women; the part of the women frontal lobe that controls decision making and problem solving is larger than that of men. The parietal cortex and amygdala in the men brain are larger than women, which means that the men has a slightly stronger sense of direction. Previous research is more study about the risk and decision making that taken by the difference gender. The aim of this study is more to be reason and to evidence that the gender is a matter in financial literacy. This research need other field research to support, such as psychology and economics because both of these field are related to this research.

Research Objective

1. To investigate the differences in financial literacy among men and women.
2. To investigate the reasons for the poor thinking of men and women, how they solve the problem and why they have this idea.
3. To investigate is gender is one of the matter when it comes to financial literacy.

Research Question

1. The research study need other field research to support, such as psychology and economics.
2. The research study was more proficient in expertise, so this research needed to interview professionals for support my research.
3. There is no other way to get the information except from the professional, so the information will be limited and cause the research difficult to proceed.

Expected Contribution

This is a study conducted by a professional analysis and survey from previous researcher. Even through, the study has not been completed, because research on financial literacy and gender is still relatively less. So this research can help to provide information on the future researcher on this kind of research. Future research is required to assess the reason gender be the matter in financial literacy. The principal limitation of this study is the investigation of financial literacy between men and women.

Conclusion

The purpose to study financial literacy among gender is to understand why the gender is the matter when it comes to financial literacy. The results of this pilot study suggest that the further research is required, using a larger sample so as to further develop a more appropriate definition of financial literacy and additionally provide a possible measurement technique for determining an individual’s level of financial literacy. The researchers are of the view that with a greater understanding as to level of financial literacy presently demonstrated by gender.