More Women Are Taking Charge of Financial Planning – Her Mind Magazine, Her Money Column
Traditionally men have taken responsibility for managing and achieving the family’s long-term financial goals. As a result, many women grew up looking to fathers, brothers and husbands for guidance. But men’s and women’s goals tend to differ when it comes to money. For men, the goal may be to get the highest return or reach a certain sum. Women’s financial goals might center around their values and what they can do with their money, not how much they will have at the end. When I speak with women (married or not) about their financial goals, I hear about their visions of providing a legacy for their children, giving to charitable causes, having a home large enough to accommodate family gatherings, travelling.
Women are rapidly becoming more engaged in the process. According to a study by Fidelity Investments last year, in 2012, 24 percent of women claimed primary responsibility for day-to-day financial decisions (up from just 15 percent the previous year) and those who were the primary long-term financial decision makers more than doubled to 19 percent in the same period.
I meet women who are interested in financial planning and investing but are not always confident. Recent research on household financial management by academics and financial institutions has shown that women often make better investors and planners than men. Women, the studies indicate, tend to put more thought and research into various strategies while over confident men can act quickly, leading to overly aggressive allocations or to chasing returns.
When both partners are engaged in the process, there is greater potential for financial success. Working with couples, I have often observed that one spouse is more of a risk taker; one may be a worrier while the other is usually more of a spender with an attitude that things will all work out. Partners will balance and complement each other if they are open to communication and working together. Otherwise, the spouse who isn’t involved may face unfortunate and potentially devastating surprises down the road. Couples can learn a lot about each other by discussing how their parents handled the finances. Olivia Mellan, a financial mediator, has written several books to help couples bridge these gaps. Today more and more women take the lead in household financial management. If you want to learn more, there are many resources available.
Money Harmony: A Road Map for Individuals and Couples, by Olivia Mellan. A great book for couples.
Financial Experience & Behaviors Among Women, a Prudential Research Study. prudential.com/media/ managed/Womens_Study_Final.pdf
Couples Retirement Study, by Fidelity. fidelity.com/inside-fidelity/individual-investing/ fidelity-research-shows-more-women Want to invest better?
Act more like a woman, a “Washington Post” article http://wapo.st/19ppuKl
MoneyClubs.com. Great for women who want to learn together.
MakingCHANGE.org. Local nonprofit offering financial education.*
Lyn Dippel, JD, CFP®, President of FAI Wealth Management, provides financial planning and investment management for transitions such as retirement, career changes, sale of a business, relocation and inheritance.
This article was originally written for the Her Mind Money, Her Money Column
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by FAI Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from FAI Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. FAI Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of FAI Wealth Management's current written disclosure statement discussing our advisory services and fees is available for review upon request.