Girl math may be a new term, but the concept has been well-documented in cognitive psychology. The field calls it “mental accounting,” a mindset where “two dollars are not treated as equals,” according to Dan Egan, director of behavioral finance and investing at Betterment.
And although the name itself assigns a gender to this mental accounting, the viral videos have simply lifted the lid on a trend people of any age and gender frequently and unknowingly participate in.
“This has nothing to do with being a girl per se,” Egan said via email. “There’s an in-group inclusiveness and non-judgmentalness to these videos, which makes it easier to be vulnerable and talk about mistakes/silly things we do.”
While that might provide some catharsis, leaning into the logic of girl math carries some major financial risks — here’s how.
If I paid in cash, it’s free
One of the central beliefs of girl math is that cash doesn’t count. Girl math adherents posit that when you pay in cash, the purchase is “free” since your bank balance technically stays the same after.
It might take some mental gymnastics, but in these days of using cards for every purchase, it’s easy to understand how cash feels different. In fact, if you’re doing it right, paying for things in cash can be a great way to curb your spending.
An old budgeting method known as “cash stuffing,” or the “envelope system” for Dave Ramsey fans, has recently seen a resurgence with the TikTok generation. This method allocates specific amounts of cash to physical envelopes designated for different spending buckets, like groceries or entertainment. Whatever’s in the envelope is the maximum amount available to the spender within a certain time period (e.g. two weeks). Once the cash runs out, that’s it until the next spending period starts.
Following a budget may be way less fun than telling yourself your $12 Starbucks afternoon pick-me-up doesn’t count, but it’s a small price to pay for financial stability.
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If it’s under $5, it’s free
With Gen Z feeling the crunch of everything from high rental prices to student loans these days, small $5 purchases may seem insignificant to them.
“It’s very hard to kill yourself with a thousand paper cuts, and it’s very hard to really get in trouble spending small amounts of money,” Egan says. “Spending too much time deliberating or worrying about little purchases probably costs you more time and stress than money.”
But this girl math doesn’t add up long-term. If you spend $5 every day for a month, you’ve spent $150. Even according to girl math, that’s not free. Over time, these small costs can erode your financial stability and make it hard to set aside enough for long-term savings.
And it’s this rule specifically that has spurred the most pushback from both the personal finance community and the math community, who view the trend as amplifying the stereotype that women are bad with money — something both communities have worked hard to fight against.
Personal finance experts would tell you there’s no such thing as free money. The closest you can come to that is either through 401(k) employer-matching contributions or the magic of compound interest. And although there’s some onus on you to create the conditions for that money to find you, some apps make it as easy and passive as investing your spare change.
I’ll lose money if I don’t buy this
The philosophy behind this rule has an unlikely champion: investing legend Warren Buffet. It’s all about opportunity cost. Not snapping up a stock when it’s at a low can cost you money in the long run. The same principle can apply to sweet deals on groceries, clothes or airfare.
The issue is that this girl math rule often helps justify expensive purchases that aren’t totally necessary. The Kiwi radio hosts famously used girl math to justify a listener’s $330 dress purchase for the upcoming wedding season. The hosts argued that because she’ll wear the dress to three different weddings, it only “really” costs her $110 per wear. So it’s “free” because that’s the same price as renting one dress for one wedding.
“Low per-use cost (if I spend $1,000, and use it 1,000 times, that’s only $1 per use) is suitable for making us feel better about big purchases,” Egan says. “But your credit card and your bank account don’t let you pay for it $1 at a time.”
Just think about it this way: if you don’t have the funds to pay off a big purchase right away, ask yourself how much it’s going to cost you in interest before you can clear it from your credit card balance. If the total comes out to less than buying an item full-price, then yes, you saved money. If not, then it may be the case that the girl math isn’t working in your favor — and it could actually be subtracting from your future financial stability.
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