By Binney Wietlisbach
In many ways, women of today barely resemble women of 50 years ago:
- Women now account for nearly half of the workforce1, up from 37 percent 50 years ago2.
- Women now earn more secondary education degrees than men3.
- Women now hold 52 percent4 of all management, professional and similar occupations (albeit they still lag in senior level positions).
In many ways, as women, we are making big strides. In other ways, women still have plenty of room to grow. One such area is financial literacy. While 4 in 55 women want to get more involved with their finances, only a little more than half are likely to discuss finances with their partner. Among women who do play an active role,the majority handle everyday expenses and charitable donations, while men handle investments, taxes and financial planning.
Since 90 percent of women will become the head of their household6—fully responsible for all financial decisions—at some point in their adult lives, financial literacy is a mountain women must summit.
Barriers to Female Financial Literacy
In our Speaker Series for Women, a program we have held for thousands of women over the past decade, we’ve identified three obstacles—whether subconscious or conscious—that keep women from participating in family financial management.
- Perceived Confidence: While surveys7 have found unmarried women are no less confident about their financial skills than married men, married women rate their financial skills lower than married men do. Women are also more likely to say they’re financial “beginners.”
- Time Constraints: In the hubbub of life, finding time for anything other than the immediate task can be difficult. Task splitting becomes necessary. During this exercise, many women opt, intentionally or otherwise, to hand off more advanced financial tasks to their partners.
- Gender Roles: In some cases, husbands incorrectly assume their wives are uninterested in managing their finances. We’ve found many women want to participate but were never asked. In other cases, women perceive men like handling this task more and defer.
The Challenges of Remaining Financially Absent
As a financial professional and a financial co-chair in my family, I’ve seen the tangible benefits and financial rewards for women who take an active role in all facets of personal finance – from the basics of budgeting and saving to the complexities of investing and planning for retirement. All of us at Haverford Trust, especially our ranks of female team members who account for 47 percent of all employees and 20 percent of our Board of Directors and Advisory Board, see the same thing.
We’ve also seen women face financial adversity when they are not involved at all. Sadly, when women are suddenly thrust into head of household duties, be it after outliving their spouses or through divorces or separations, they often become deer in headlights. Sometimes they find themselves locked out—literally—of their accounts. Many times, they’re unsure of who to turn to for quality and smart advice. Small decisions become mountains; the situation becomes daunting, and women become anxious, reluctant and unwilling. Oftentimes, women in these scenarios fall victim to poor advice from those they deem trustworthy.
“Financial literacy is a mountain women must summit.”
That’s why we advocate for women to preemptively summit the financial literacy mountain. While we know every person—woman or man—may not be interested in leading their family’s finances, it’s necessary for everyone to at least understand the basics.
Financial Knowledge Tip-Toes
Luckily, becoming involved in a financial discussion is easy. It begins with simply participating in one meeting with a financial advisor or wealth manager. This could result from women advocating for themselves or their partners advocating for them. Either way, sitting at the table is a huge leap in the right direction.
From there, we advocate for women to participate in creating their family’s financial plan and join plan discussions and reviews. For the time strapped, this doesn’t have to be a weekly activity. Even monthly or quarterly check-ins can make all the difference in achieving financial empowerment. When getting started, questions like these are great prompts to spark thoughtful discussion:
- How much debt do we have in relation to our assets?
- How much money are we saving annually?
- Are we positioning ourselves to retire in the way we envision and at the time we want?
- What is our long-term plan?
By taking these simple steps, women quickly gain a baseline knowledge of where their investment and financial situations stand. As a result, they stay involved and active in the process from then on. The rewards of doing so are aplenty: comfort, empowerment and the ability to take the wheel should life take an unexpected turn.