Women’s Hidden Approach to Money
It is time to get in step with today’s financial realities.
A new era?
Late spring and summer bring graduations and weddings – concurrent celebrations of warm weather and family. Today, amidst
these celebrations the economic world is in flux, which brings pressing new questions to the modern family about how to
fund health care, higher education, and retirement. Yet many women continue to harbor "old fashioned" attitudes and approaches
to present day financial responsibilities. Too many would simply prefer to leave it to the spouse – and therefore miss an
opportunity to contribute to the family's overall financial success.
It is Different for Women.
Why are these old attitudes still prevalent today, when more women than ever are now breadwinners? Women are subjected to all kinds
of subtle societal messages about money. Parents typically encourage sons to start earning money at age 13, but they don't
encourage their daughters to earn money until age 16. The results?
- Over the course of their careers women earn less than men do.
- Women may need or choose to step away from their career paths, and can spend 10 years away from the workforce vs. one year for men.
- It takes five years to recover financially for each year away from the workforce.
- Women are three times more likely than men to work part-time.
Women often have math anxiety. That fear interferes with financial planning decisions. And so, when we are married, many times women choose to be the financial follower, rather than leader, in the relationship. "I'll let him do it," many women think. "He's better at it." But in reality, her spouse may not know any more than she does. Often women literally "pass the buck" because we don't want to make a wrong decision. Consequently, we often make a decision by default. As a woman and a financial planner, I am especially aware of these unique situations.
Money Roles.
Women tend to save more, but have less, because we're conservative. In a relationship, a woman can tend to be conservative in investment strategies; a man
can be aggressive. Aggressive can do well in up markets; conservative may be more appropriate in down markets. That can be a good thing for couples as
spouses can balance each other out.
During financial discussions, a woman can appear to let her spouse do the heavy financial lifting. However, every woman needs to consider possible consequences. What would she do if her partner dies or becomes disabled? Women step up to the plate if we're forced to, of course, but it's much better to raise and address such issues before an emergency or crisis occurs.
Women (and their partners) often need help in sharing their financial roles. It can be difficult for passive partners to be more active and offer opinions, but it is financially beneficial for the entire family when both partners have a voice. In many families, one often starts out balancing the checkbook and paying the bills, but more often than not, it's someone else who's doing the investing. In such situations, a "modern" financial planner working with the family will want to encourage active participation of both partners so it becomes a true collaboration.
A Total Approach.
SFinancial planners are trained to look at all aspects of a client's life—including how clients feel about money. Planners often
find it helpful to begin work with couples by having each partner fill out a fact-finding questionnaire to determine what
each partner knows and what s/he doesn’t understand. A questionnaire can create a neutral, safe environment to identify
what partners don't understand. Both individuals need to feel comfortable enough to ask questions about investing and financial planning.
Once a couple is comfortable to talk openly, it's time to roll up the sleeves and get to work on the business of creating and managing wealth, as a true partnership. I have learned over the years that psychological obstacles and societal imprinting can be overcome. Once they are, there's no reason women can't successfully manage – and grow – the family’s finances. After we lose all of that money-baggage, we are ready and fully equipped to pursue prosperity with joy and confidence.