Money Mom Monday: Taking the Reins
Women have — for generations — had the stigma of being bad with money. Lucy begged Ricky for her allowance. Carrie Bradshaw blew her retirement fund on shoes. Even now, many of us can name at least one girlfriend who splits a purchase between cash and credit so she doesn’t have to own up to the cost to her spouse.
Women are getting a bad wrap. These days, more and more of us are taking charge when it comes to our family’s money. At the end of last year, a study by FindLaw.com found that 37 percent of married women between the ages of 18 – 34 handle all of the household finances, compared to 30 percent of married men. In a 2006 study by Money magazine, 60 percent of women said they’re responsible for budgeting, bill paying, and day-to-day spending in their households.
That, according to piles of research, turns out to be a good thing for your family’s balance sheet. Why? Because women are actually good at managing money. Take a look:
- A Merrill Lynch study a few years ago found that only 35 percent of women have held a losing investment for two long, versus 47 percent of men. To take it a step further, only 48 percent of women said they’ve since repeated the mistake, compared to 61 percent of men.
- The same study found that a quarter of men have bought “hot” stocks without research. Only 13 percent of women have admitted to doing the same.
- An international survey by Reuters in 2009 found that women are more responsible than men when it comes to money. They’re less likely to get in debt, and more likely work hard to be financially independent.
- A nine-year Bloomberg LP study, released in 2009, found that hedge funds run and managed by women nearly doubled the returns of those ran by men. The average woman-managed fund returned 9 percent; those managed by men returned only 5.82 percent. To add insult to injury, funds run by women were down only 9.6 percent at the peak of the financial crisis, compared to the 19% decline that funds managed by men saw.
Bottom line: Women are careful. We think decisions through before pulling the trigger, and instead of just taking risks, we take calculated risks. We also seek help, when we need it – and when it comes to money, many of us do – and we admit our mistakes. We are, when it comes right down to it, the perfect money manager for our families.
But taking responsibility for your family’s financial future is also good for your mental health. The American Psychological Association’s annual Stress in America survey recently found that financial stress takes a heavier toll on women. There are several ways to remedy that, but being educated is one of the best. If you know what’s going on with your family’s money, you don’t have to wonder whether you have enough in savings, or if that bill was paid on time.
“I do the budget and schedule the payments, and I know they will get there on time. I don’t feel in charge, because my husband is still involved, but I do feel less stressed,” says Kathleen Noland, who began handling her family’s money after a little trial and error. “We realized that I pay the bills on time, and I have a better sense of what’s coming in and going out, because I do most of the shopping. I also feel better when I’m in control.”
Of course, the best case scenario, in my book, is sharing the financial duties – or at least having regular money meetings so you’re both well-informed. It’s important to keep the lines of communication open – Kathleen says she and her husband have a conversation about their finances about once a week, and discuss with each other before making any big purchases. But no matter what system works for your family, clearly, it’s time to retire the stereotypes.
