One of the challenges associated with women and money is that it’s still difficult to be involved. Here are four reasons to get involved with your household finances.
While it appears that some women are increasingly claiming places as “family CFOs,” the reality is that there is still a gap between the sexes when it comes to actually being involved. Even though couples often believe they are on the same page with their finances, the reality is that many women — particularly Millennial women, according to a Fidelity study — still aren’t as involved as they could be.
When you look at your couple finances, how involved are you? Should you be more involved with your couple finances?
Women Need to be Involved in Household Finances
One of the issues that comes up with couple finances, and a lack of involvement, is the fact that women need to be involved. There is still a long way to go when it comes to the financial situation for women in general, mainly due to the traditional gender roles that can impact long-term finances for women. James Roberts, CFP, and CEO of Roberts & Team Wealth Management offers four reasons that women, especially, need to be involved in finances:
1. Financial advice = better financial success: “Statistics have shown that 64 percent of women millionaire investors and 82 percent of women ultra-high-net-worth investors sought financial advice,” says Roberts. “This leads me to believe that those women who have educated themselves about their family finances and investments have also increased their likelihood of personal financial success.”
This doesn’t mean that you need to hire a money manager to be successful. However, it does indicate that learning about money and how it works can be helpful. Survey after survey indicates that women don’t feel as confident as men with the ability to invest and manage money. Overcoming that lack of confidence can be a big help.
2. Women live longer: Even though the life expectancy gap is closing a bit, the reality is that a woman is likely to outlive a man. If you live in a household with a partner of the opposite sex, you will probably survive your partner — and that means you need to know about the financial situation. You don’t want a crash course in the family’s finances when your partner (no matter his or her gender) dies. You need to be involved now so that you can move forward if you have to.
3. Women tend to work fewer years: One of the big issues that comes with talking about women and money is the reality of women and careers. Part of the gender pay gap is due to the fact that women often work fewer years. “Women are historically more nurturing than men,” Roberts points out. “For this reason, women are more likely to leave the workforce to care for a child or elderly parent.”
Why does this matter? Because it “breaks their work pattern,” continues Roberts. “This has a negative effect on Social Security benefits, as well as promotions and salary increases.”
If you want to make sure that you are taken care of, since you are likely to live longer but earn less, you need to be involved in household money decisions, and educated about making the most of what you have.
4. Women are better investors: “While it takes a woman longer to feel comfortable with a change in investment strategy, she is also more loyal to her plan once she determines its appropriateness,” says Roberts. “For this reason, women are believed to actually be better at making investment decisions than men, who are more likely to react abruptly, deviating from an agreed-upon investment plan.”
When women are more involved with the investments, there is a strong change that they will do better over the long haul, helping the overall family finances.
Both Partners Should Be Involved in Money
Of course, these are generalized trends when it comes to women and money. The individual reality for most people is usually different. For example, I’m the one who manages most of the money and investments in my relationship. (I’m also the primary breadwinner.)
This means that my husband sometimes needs to be encouraged to be a little more involved in our family finances. After all, if I died, he would need to understand where everything is, and what’s going on with the money. Plus, he has plenty of solid insight that can benefit our financial situation overall.
The reasons above are good reasons for anyone to be involved with their household finances, regardless of gender.