Over the years, I’ve helped scores of women work through their financially complex divorces. But, sometimes, getting the conversation started can be a little tricky. After all, anyone who needs my help must be able to talk frankly about money, and the truth is, many women are just not comfortable doing that.
It’s a phenomenon Fidelity recently explored in its 2015 Fidelity Investments Money FIT Women Study. The research was conducted to measure how women, in age groups from Generation Y to seniors, view and address their finances, including obstacles that may hold them back from being more engaged –and from my perspective as a divorce financial advisor, the results were troubling. For example:
- The vast majority (80%) of women who participated in the survey said they have refrained from discussing their finances, even with close friends and family. The most common reason cited was “It’s too personal” (56%), followed by “I don’t want those I’m close with to know this information” (35%), “It’s uncomfortable” (32%), and “I was raised not to talk about finances” (27%).
- Only 47% said they would be confident discussing money and investing with a financial professional on their own. (By contrast, 77% would discuss medical issues with a doctor on their own.)
- While 82% are confident managing day-to-day budgeting, their confidence slips when it comes to longer term financial planning. Of those surveyed, 62% are confused about navigating their future financial path.
Why does it matter if women aren’t comfortable talking about money? Because women must be as easily conversant and readily knowledgeable in financial matters as men are. If they’re not, they’re more likely to be taken advantage of –in divorce, and in many other areas, as well.
Are you someone who needs to increase your comfort level for discussing money? If so, try these tips:
Take yourself to school.
There are many excellent resources for women who want to learn more about their finances. If the topic makes you anxious, hit the books! Knowledge is power –and it’s time to claim it yourself, instead of leaving it to others.
Information is available for every level of investing, real estate, debt management, taxes, and of course, securing your financial future before, during, and after divorce. Choose reputable sources, and avoid sales pitches disguised as general information. If the idea of a formal course of study appeals to you, check into classes at your local community college.
“Women should feel empowered, not overwhelmed by finances,” Rebecca Wiggins, Executive Director of AFCPE®, told me. “There are many tools and resources available to help educate women about their finances, from websites like NEFE’s Smart About Money and budget programs like Mint and YNAB to workshops and courses taught at a community center, college, or YWCA.”
Subscribe to a financial magazine.
Even if learning about personal finance isn’t tops on your “to-do” list, read a financial magazine to broaden your horizons. There are financial aspects of all current events and trendy topics, and these angles can be interesting in ways you didn’t think possible.
Practice talking about money.
Despite what you may have been raised to believe, talking about money isn’t necessarily rude. You don’t have to divulge information you’d prefer to keep private, and you don’t have to fish for details of your friends’ financial lives. Just begin to include financial topics in your conversation. For example, did you catch Patricia Arquette’s Academy Award acceptance speech? Her remarks would make an excellent springboard for discussion about wage inequality, which could lead to an exchange of strategies for asking for a raise at work, which could lead to a conversation about 401(k)s, etc.
Financial matters are part of our lives. It needn’t be awkward to discuss them, and you can do it without sharing personal details socially.
Consult with a professional.
You do want to share details with paid professionals, though. Whatever your particular need, there are specialists whose job it is to help you with it. Today’s financial portfolios are exceedingly complex, and you may decide to enlist professional guidance to get a good working knowledge of yours.
“Oftentimes it helps to meet with a professional,” Wiggins said. “Accredited Financial Counselors (AFC®) provide unbiased guidance to help clients work through financial challenges, identify financial opportunities, and develop successful strategies for achieving long term goals.”
Realize that money does not define you.
Keep money in perspective. There will always be people who have more or less money than you do. And, while money is definitely important – it gives us security, as well as some of the material things we want in life — your net worth doesn’t represent your value as a person.
When you distance your identity and emotions from your money, you’ll find it’s easier to discuss it as you would talk about building a house. In fact, any “taboo” about discussing financial matters, especially in general terms, can soon begin to seem silly.
Commit to improvement, but don’t expect to become an expert overnight.
There’s plenty to learn about managing money over a lifetime, and you won’t know it all tomorrow. Whether you’re embarrassed at what you don’t know, or simply have an ingrained reticence when it comes to discussing financial matters, you need to make changes over time.
Fidelity did uncover some good news, as well. For instance, the overwhelming majority of women surveyed say they want to get more involved in their finances. That’s music to my ears because when women commit to improving their financial literacy, the effects go far beyond what they learn about money.
Talking openly about finances with your husband, preferably before you are married, is an excellent way to strengthen your relationship. Share your short- and long-term goals, discuss investment risks, and find strategies to meet those goals together. In other words, lay a foundation for mutually respectful give-and-take. That way, you’ll always play a role in decisions, and your knowledge will continue to grow as your financial circumstances evolve.
Remember: Statistics show that most women will be in control of their own finances at some point in their lives, whether they choose to or not. Even if your marriage is long and happy, odds are that you will live longer than your husband. Being comfortable talking about money is an important part of being prepared to handle your financial life as a single women, or holding up your end as part of a partnership. And the sooner you can do it, the better.
“In today’s society, women wear more hats than ever before – they often balance motherhood, successful careers, and still manage the household. Creating a spending plan can feel overwhelming, but it’s an important step in building a strong financial foundation and instilling lifelong lessons in future generations,” Wiggins concluded.