This just in: In the 21st century, plenty of women are still leaving the long-term financial planning decisions to their husbands.
According to a study from UBS Global Wealth Management, 58 percent of women let their spouses handle the big-picture finances.
Here’s what really startled me, though: In the United States, 56 percent of millennial women (ages 20 to 34) were okay with letting their husbands handle the big money choices.
Have we learned nothing from the past few decades?
As a very young woman experiencing poverty, sexism, harassment and exploitation, I used to think, “Things will be better for our daughters.” Surely they would have more. More education. More redress. More lifelong options. More financial security.
Yet we’re still raising our girls to think they’re not good with money, or maybe that men are somehow better at it.
More than 3,600 women in nine countries were interviewed for the study. The results aren’t exactly universal because it focused on women with high net worth ($250,000 to upwards of $1 million in investable assets) rather than a mix of financial demographics. Still, the results are interesting, and troubling.
Apparently we know that long-range financial planning is important; study participants identified retirement, long-term care and insurance as the top issues. Yet only 23 percent of the women interviewed manage – or even help manage – these things.
Too busy with the daily stuff?
One reason women might not focus on the future is that they’re too busy with the quotidian crap. Eighty-five percent of those interviewed are either “highly involved” or entirely in charge of short-term money needs, i.e., the daily expenses.
Full disclosure: I was guilty of that myself, being so busy putting out financial fires that I didn’t think much beyond the latest conflagration. Well, that plus growing up in an era (and a region) that deferred to men, and the fact that the man I married was controlling and abusive. I knew that we weren’t saving enough for retirement, but when I tried to say so I got quite literally shouted down – and I didn’t have the ability to stand up for myself.
At least we both maxed out our 401(k) plans, and saved some ready cash. But it makes me sad to think about how much farther ahead I’d be right now if I’d been able to insist on smarter money choices.
Not that I knew many of them: I was raised to work hard, pay my bills and save anything left over. Save, not invest. Heck, I didn’t even use certificates of deposit back then, when they were delivering not-bad interest rates.
You don’t know what you don’t know. That’s why I wish that financial literacy classes were required in high school. Even though the general consensus is that overall they don’t work, I still think I’d have had a better chance if I’d known a few basic principles other than hard work and thrift.
Saving your money is not enough. You have to make your funds grow. That is, you need to think long-term – and not enough women are doing this.
Financial planning: Why we should care
“When 58 percent of women around the world – including the next generation of Millennials – defer to men on important financial decisions, we need to ask why,” says Paula Polito, Global Client Strategy Officer at UBS.
“This dynamic could go on for generations to come, unless both men and women make a commitment to engage in financial decisions together.”
Well said, Ms. Polito.
Ignore this at your peril, ladies, because divorce or the death of your husband might lead to some seriously rude awakenings. According to the UBS study, about three-quarters of divorcees and widows “discovered negative financial surprises” when they finally took a closer look at the household finances.
That’s the stick. Here’s the carrot: Women who take part in long-term financial planning are overwhelmingly more confident in their financial future (94 percent) and are less stressed about money (91 percent).
Suppose your husband really is “better” at money. Doesn’t matter. Women need to be read in about long-term finances. Even if it bores you spitless, be present for the planning and aware of how the plans will play out during your lifetime. (This is where a monthly money date comes in handy.)
Above all, let your daughters see you being part of this. We need to raise our girls to know that handling money responsibly is part of adulthood. Ceding control of the long-term financial planning isn’t just lazy. It’s potentially life-changing – and not in a good way. Take it from someone who’s still playing catch-up.
I remember my big sister telling me the best advice from our mom is “a woman should always have some money of her own”. Knowing that her home life was really bad resonated with both of us. So we made sure we both had accounts in our own names. Proved very good advice for the two of us.
My husband’s illness 8 years ago changed everything. He now wants to retire next year which is 3 years prior to being eligible for social security payments. We’ve both invested carefully so it looks like we can accommodate his early retirement wishes. I am also retiring soon. We started investing during the first few years of marriage and continue to the present day. We each decide the direction of our own investments.
Smart. And I’m glad you can retire early and enjoy time together.
I have the opposite problem: My husband hasn’t ever had a retirement of any kind. I have my work 401K and a couple others. Any time I try to bring up retirement savings etc I am told, “That’s your thing.” As we are in the 3-5 years from retirement stage, I about dragged him to a financial planner last spring. This poor financial planner was given a heads up to insist on husband including himself in decisions. It worked to a point, so at least husband knows everything that is out there. Still no interest in it. After 37 years of trying, he knows if I croak he won’t starve and can pay the bills. He’s cautious with money so at least that’s not a concern.
I enjoy your blog. It’s a reinforcement of my lifestyle for the most part.
I don’t envy you. That sounds a bit stressful. And thanks for your kind words.
You’re not the only one.
I find it extremely frustrating with financial planning that too many people simply don’t care. That would be fine, except many of these same people want someone to bail them out when they run out of money. Perhaps women are worse than men in this regard, I don’t know. But not caring where the money goes is pretty common among men, too.
I’m not sure that women ‘don’t care,’ as much as they’re scared to care — because then it would mean they’d have to DO SOMETHING about this.
You don’t want to admit to fear like that in a survey. It makes you feel small. That’s my guess as to what’s going on.
Husband retired about 3 1/2 years ago, when his workplace just got too stressful. He recently applied for Social Security. (He just turned 64.) However, he has a pension from the state, and I’ve continued working my own business. We get by well, if we’re careful…and checks from our retirement program with an investing firm are due to start this spring/summer. Since we can live on what we’re making now (his pension and my income), I feel certain we’ll do just fine, with the extra money!
I am proud to say this is due to God’s grace and a lot of frugal living — many years, we didn’t make much more than $20,000 annually while we were saving. We were also able to buy several years of service at the Brick’s job (he worked for the local school system), which let him retire early. One of the smartest decisions, though at the time, it seemed a little iffy.
I just wanted to warn the ladies here of a problem my Mother had, when my Dad passed away. They were joint on all of their credit cards, but, after Dad was gone, the credit card companies closed out every single account they had. Anytime my poor Mom needed to order something, she relied on me ordering it for her, with my credit card, and then she paid me back. Ladies, make sure you’ve got a credit card or two in your own name. I don’t know of anyone who has successfully opened a charge account after they retired, even if they have a good pension.
Yes. Credit expert Beverly Harzog hears from older women who’d always let their husbands handle the money — and that included piggybacking on their husbands’ credit. Without credit in your own name, you will likely pay higher interest rates for loans (assuming you can even get them).
More at:
http://donnafreedman.com/nearing-retirement-check-your-credit/
This is harsh but in this day and age, with as much as women see on TV and online, if you elect to be ignorant of your family finances or how to prepare for your old age, you have elected to stay ignorant. There are lots of excuses or reasons why, but I get tired of women in this country acting as if they are in the Victorian age, not able to figure things out or act for themselves. Unless you are mentally ill or intellectually challenged, there is no excuse.
I can’t imagine not being involved in planning. It would drive me nuts to not know the details. But from birth, my mother insisted I be aware and able to depend on me and only me. She never wanted me to feel trapped by circumstances.
One possible issue could also be that in financial education classes, they don’t really address women or educate in a way women grasp. I can’t tell you how many times I’ve interviewed someone to look over financial matters and they talk only to my husband. (Bless him for seeing that and always calling them out as addressing the wrong person.)
Same thing happens with car buying and I avoid that at all cost. The new car smell brings me zero joy after all that nonsense.
My parents modeled a lot of good saving habits.
My Mom couldn’t be persuaded to “invest” beyond government savings bonds, but was diligent enough at getting them that they got me through college with only an average amount of debt. She also chose a union job with a pension. Essentially, she highly prioritized security in the big picture money questions. So I learned plenty about saving and living below my means, though very little about investing. I didn’t intuitively trust index funds until I was 30 or so, I think.
My Mom was the primary earner, and the checking account was in her name. I don’t think my Dad was joint on it until much later. Most credit cards were his name, but she always had at least one that was just hers (usually the seldom used store cards). Their co-op was joint, but that was not an asset the way a house is. When my Dad passed away first, the bigger problem was that he had taken care of all the internet things (including some auto pays) and that was hard to unravel.
Between my partner and I, I am clearly the money-planning one. I’m just much more interested in stocks/bonds/401(k)s/IRAs/HSAs/tax wrangling/FSAs/ect. He does well on real estate, but I can also function in that context ok without him. But we have mostly-separate finances and every time we’ve tired to get the on the same page for every day expenses and budgets, it has been challenging. So we’re lucky that separate works for us.
DF and I are separate-finance folks, too. It works for us, so why change it?
Wow these women have $250K net worth minimum and defer their finances to men? The only reason I think could make sense in this situation is couples join finances after the marriage and they decide for the man to manage investments and the woman to manage daily expenses. I’ve never been an advocate of this situation. Couples need at least some separation so each partner could have a sense of independence and feel financial responsibility.
I must admit I was expecting a little bit higher than 58% in this day and age, I guess we’re still working on making women more participative in financial planning. I do understand why women can get overwhelmed by household daily expenses but I think we owe it to ourselves to make an effort to reach that goal of financial security in the long-term.