Financial Planning and Long-Term Saving Guide

Women and Money

Why you need to take control now. The good news: More than a third of American women are now the family breadwinner (look at that!). The bad news: We still tend to pass the buck on important money matters, such as investing and retirement. Ready to take charge of your financial future? Start right here.  

By Geraldine Sealey
Real Simple March 2008Lucas Allen

Financial Barrier No. 1: We Lack Confidence


Odd, isn’t it? So many women radiate competence and authority on a daily basis (brilliant doctors, strong managers, cool and collected stay-at-home mothers). But when it comes to this one particular subject, not so much. Take Amy, a 42-year-old senior manager based in New York City. “Money information just bounces off my brain,” she says. “It’s like I have a force field that won’t let it in.” She’s not alone. With the exception of women who work, say, on Wall Street or in accounting, even some of the most capable among us can become champion self-doubters when we have to talk about our money.

Experts say this is an understandable reaction to the relative inaccessibility of the male-dominated financial world. Take a peek at any mutual-fund prospectus and you’ll find tons of abstruse language: 12b-1 fee, market capitalization, front-load, back-load, no-load. Some men may savor the jargon and feel a sense of pride when they master it, whereas women tend to see it and shut down, explains Galia Gichon, the founder of the women-focused financial-education firm Down-to-Earth Finance, in Westport, Connecticut.

Gichon recalls working with a successful single mother in her 40s who didn’t have any long-term savings and refused to start planning for retirement. “The concept felt so overwhelming that she thought, Why bother? As a result, she ignored her big-picture finances completely,” says Gichon.

That desire to flee from financial planning means we aren’t always as well-informed as we should be. “Many women think that since they don’t know the language, they can’t ask questions—or they worry that their questions sound dumb,” says O’Connor.

Those fears may be reinforced by frustrating encounters with the financial-services industry. For every helpful and plainspoken adviser or planner, there’s another who can be intimidating or condescending. “Women tell me that their adviser talked about things they didn’t understand or spent the entire appointment speaking to their husband,” says O’Connor.

If money discussions make you feel nervous or clueless, you have to start talking about your finances more, not less. “To eliminate the intimidation factor, include topics of spending and saving in your regular conversation with your spouse or a trusted friend,” says New York City–based financial therapist Amanda Clayman.

It also helps to have an adviser you can depend on, even if you contact her only once a year. Make sure your money pro speaks clearly, without excessive use of jargon or acronyms, and that you feel 100 percent comfortable talking to her.

The other thing that will give you more confidence in money matters? Knowledge. For starters, review your financial statements on a monthly basis so you know where you stand. Then consider picking up a personal-finance book or visiting a money-information website to school yourself in any concepts that are eluding you.

 

 
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