Women, Money and How It Affects Who's Paying the Rent

Last week I rented an apartment to a 22-year-old guy who was new to Manhattan. After the lease signing he lamented about having to use his father as a guarantor. I told him not to feel badly about it, he was fresh out of college, after all. It was par for the course.

"True," he said. "But I don't want to have to use him the next time I move."

In all likelihood, he probably won't. If there's one thing I've noticed after renting apartments in Manhattan for a few years, is that men become financially independent light years before women. In five years time my young male client will be employed and have some money squirreled away so that if he needs to move or buy a car or whatever, he'll be able to. His female counterpart, most likely, will not. I will likely be on the phone with her father about signing a guarantor form.

I saw this scenario so often that I started to wonder why. Not to be judgmental, but to figure out why was it that if two young graduates -- who may both start an entry level position with a salary of, say, $40,000 -- why is that in just a few years the guy will likely be making double that when the woman may just be eeking along, with maybe some credit card debt to boot?

Logically, this shouldn't happen, with the economic playing field more equal than it has ever been and women earning the majority of four year degrees. The Labor Department released a study in July of this year that reported that the wage gap between men and women, particularly among people in their 20s, was shrinking tremendously.

Yet, based on what I see on a day to day basis, as they move on with their professional lives, it's the guys who enjoy more financial freedom as they grow older, and the young women who are slower to remove the crutch of their parents, if they're lucky enough to have that.

One reason is that when it comes to that first job, men actually do ask for more, in terms of salary, right off the bat. The 2003 book Women Don't Ask covers this phenomenon in great depth. One of the fist studies that they cite is the starting salaries of a group of graduate students out of Carnegie-Mellon University. They noticed that, on average, the men earned more in their first job simply because they asked for more. The women just took what they were offered, even though it was completely appropriate to negotiate for more. And so the earning gap begins because the women never thought to ask for more than what was initially offered.

It's more than just salary, though. Many of the women that I mentioned the financial discrepancy to looked at me as if I had six heads, "Hello, shopping," they said, as if this should have been self evident. Granted, I lurk around the shops as much as the next gal, but should shopping, the most clichéd reason of all, be blamed for why there are women in Manhattan who can't rent an apartment on their own? Housing is the most basic of needs. If one is shopping to the point that there is no savings -- in and of itself -- that should be a red flag.

Retail therapy, though, is here to stay. It's also a huge female bonding ritual, and one I can't knock. Nevertheless, maybe we can be a little smarter about it. I'm often surprised when I meet women who don't realize the retail mark up on clothing or that many of their favorite stores are owned by the same company, and are, in essence, the same product, just at different price points. (Gap, Banana Republic and Old Navy immediately come to mind.) Luxury brands are a particular interest to me, and I recommend Dana Thomas' book, Deluxe: How Luxury Lost Its Luster, before anyone I know buys a designer handbag.

I'm also surprised when I see women who, deep into their 20s, are still using a credit card with their parents' names on it. (I have never met a guy who did). A recent episode of MTV's reality show Downtown Girls showed one character, Nikki, blow $10,000 on shoes because she was upset about her clothing boutique's declining sales. She charged it all to her parents' credit card. Why she even had the card to begin with was a mystery to me, considering she was a grown woman with her own small business.

Supporting a lifestyle, however, is not as outrageous or self-centered as if may seem. Studies on the topic show that women are taught to invest in lifestyle and seek acceptance through it -- hence the excessive clothing, for example. Ruth Hayden, author of For Richer, Not Poorer: The Money Book for Couples said in a recent interview with Bankrate.com that, "Men have been taught to invest in things that hold value -- a house, retirement. The way that translates into spending is that women spend more money on the stuff that makes the day work. The problem with that is, most of that stuff has no asset value, no visible value."

This is a key point, especially since as one gets older -- even by just a few years out of college -- is that money matters become more complicated, not less. Right out of college a weekly dinner out might be a splurge, but as your friends start getting married and having babies, the social and financial obligations mount and are more difficult to get out of. For women, this is particularly vexing, since being invited to a wedding involves not just showing up for the ceremony, but the bridal shower and bachelorette party as well.

I've rarely had brunch with my girl friends where at least one person wasn't lamenting an upcoming wedding or shower. I've known women who have backed out of bachelorette parties for financial reasons -- and these are supposed to be celebrations. Yet, I've never known a guy to do so. Bachelor party? Yes, please! Money is never an issue. And we all know that strippers, booze and steaks aren't free.

One woman shrugged as if all this financial inequality was no big deal. "Maybe you get to a point in your life when you figure you'll get married and won't have to worry about money anymore, so it doesn't matter what you've saved or not."

Her answer was probably the most disturbing of all, but not all that uncommon. At least in Manhattan, there's a certain level of acceptable, low-grade gold digging going on, even amongst professional couples. It usually involves a sweet and pretty woman with a mediocre but somewhat dead-end job glomming on to some guy in a suit, regardless of what a jerk he is. (And believe me, I've met quite a few of them).

A few weeks ago I was trying to hammer out a rental deal with a couple who had tremendous issue with the standard New York City broker fee of 15% of the annual rent, despite having lived in Manhattan for a number of years. They noodled back and forth on it, which annoyed me, because there were plenty of other people who saw the apartment who weren't arguing about the fee. "It's not me," the girlfriend said. "It's George's money. He's the breadwinner in this relationship. I'm sure you understand."

Actually, I didn't. Relying on a guy to pay your rent -- and by extension, giving him financial veto power -- is about as antiquated as everything you see in Mad Men. Yet, at least in Manhattan, I see it all the time. Women who are otherwise educated and employed deflecting decisions to their husband or boyfriend, simply because they don't have the power to be the checkbook. Or, more often than not, behind all the sweet passivity they're hiding bad credit scores and an overdrawn checking account, factors that would likely end the relationship if he ever found out.

I bring all this up, again, not to pass judgment or poke fun, but to rally for some improvement. There are so many tools out there to help us get a grip on spending and earning -- everything from the Suze Orman oeuvre of products to the start up LearnVest.com -- that I'm surprised more hasn't sunk in. It's 2010, after all, and it's so frustrating to me to see an otherwise a functioning woman need her papa or boyfriend to underwrite her living arrangements. Kept women, we are not.