Ladies, It's Your Job Too

As a Wealth Advisor, I meet with all kinds of people to discuss their finances. There is one pattern that I have observed through the years that bugs me. I notice that very often, women remove themselves from the wealth management conversation. With couples, the men either meet with me on their own, or the women are in attendance, but say that they leave the finances to their husband/partner. When I meet with single women, they often put me in touch with their fathers before making any final decisions. What bothers me most is that in my observations, it is not men that are boxing women out of the conversation; it is usually the women themselves that are removing themselves from the personal finance conversation. I have also noticed that these women tend to be intelligent, high earners, and incredibly capable human beings.

I repeatedly asked myself why these intelligent and confident women would stop themselves from understanding their personal finances. After researching this matter and asking friends and clients, I have concluded that it is a matter of confidence that prevents women from being involved in their household personal finances. In one study by The Center for Talent innovation, The Power of The Purse, they found that women and men are almost equally financially literate. 39% of men passed their financial literacy test, and 35% of women passed. When this same group of people was asked if they feel they are financially literate, women were 44% less likely than men to consider themselves financially knowledgeable. Women are not less educated, or less smart; they are just intimidated to get involved and ask the right questions.

Ladies, you are not dumb, you are just scared. You are scared of your financial advisors that spoke in only financial jargon and left you out of the conversation. You don't want to sound dumb by asking simple financial questions, when really, it is completely normal to ask basic financial questions. We never learned about personal finance in school, and unless you took a deep interest on your own, most people do not understand the difference between a 401K and an IRA, or the difference between a stock and a bond.

With that being said, women need to stop being scared, and need to push themselves to get involved in their household finances for a number of reasons.

Firstly, it's your money, don't you want to know where it is and what it is doing? I am willing to bet that you make your own decisions regarding your career, pick out your own clothes, and make your own decisions as a parent. Why would you neglect the one thing that will help you live comfortably? There are so many ways that you can make your money grow and work for you, and it is essential that you bring yourself into that conversation.

Secondly, 40%-50% of all marriages in the United States end in divorce.
I hope it's not you, but you just don't know. There are so many ways that a spouse can hide assets in the event of a divorce, and if you are not aware of your overall financials, that can make it very easy for your spouse. The national endowment for financial education has found that 3 in 10 adults with combined finances have hidden assets or purchases from their partner. The same study found that approximately 7.2 million Americans (4.4 million men and 2.8 million women) have hidden a bank or credit card account from their live-in spouse or partner. If you are aware of where your money is and how it is invested, it will make it far more complicated for anyone to hide assets from you.

Another reason women should be involved in their financial life, is that as women, you will likely outlive your spouse. In the US, average life expectancy is 79 years for women, and 72 years for men. Now if your spouse is older than you, it leaves you with a high likelihood of living on your own at some point.

Lastly, women add a different perspective. For example, when I meet with families, it is usually the woman that wants to discuss saving for education, or obtaining life insurance in the event of the breadwinner's death. You want your opinion to be a major factor in the conversation when your family does financial and estate planning.

For all the women that think their personal finances are just not their business or their responsibility; you are wrong. I am aware of all of the responsibilities that women may already have; working, taking care of family, taking care of a home, and more, but it is absolutely your business and your responsibility. Find the right team to work by your side, and you will be absolutely capable of handling your home finances.