In Part I of A Woman’s Financial Responsibilities in Her Household, I discuss some gender generalizations regarding how money responsibilities are handled in a typical household and share with you some introspection regarding my situation during the earlier years of my marriage.
There are many aspects to personal finance and financial planning, ranging from budgeting, paying for a vacation, purchasing a home, purchasing insurances, retirement planning and estate planning. This is important to keep in mind as we discuss household financial responsibilities.
Gender Generalizations
In most households, the typical stereotype type is that the wife is responsible for balancing the checkbook (e.g., managing the day-to-day budget) while the husband attends to bigger picture financial planning (e.g., purchasing insurances, tax planning and investing retirement funds).
Certainly, there are households where the wife doesn’t participate much in or any part of the family’s financial responsibilities. This was illustrated in a 2013 Fidelity Investments Couples Retirement Study, where two in ten women admitted to having only some or no input into the day-to-day financial decisions in their households. Then, there are households where the wife is the CFO. And in between, there are households where both the wife and husband participate equally in every aspect of the family’s financial situations.
In general, though, women still view managing and balancing the family’s checkbook and budget as a woman’s role. These women believe such responsibilities are traditionally deemed more feminine. Husbands, on the other hand, are more suited to attending to the bigger picture household financial planning, as they are being seen more technical savvy and/or have a higher risk tolerance personality.
This gender generalization around household money management is evident in the 2014-2015 Prudential study on Financial Experience & Behaviors Among Women. The study reported that women respondents ranked themselves highest on their knowledge of managing debt and managing money (about 30% gave themselves an “A”) and lowest on their knowledge about generating an income stream in retirement and investing (less than 10% gave themselves an “A” and many gave themselves “F”). Such findings certainly give some insights into what women in general value and do well at when it comes to financial responsibilities in the household.
Many of my married girlfriends recalled their mothers taking care of the family’s basic day-to-day budget. Once married, my girlfriends just automatically followed their mothers’ footstep when it came to managing finances in their own households. Yet, when it came to their household’s bigger picture financial planning, many of my girlfriends didn’t have much of a clue.
For instance, some didn’t know all the various liabilities they have, some didn’t know all the different retirement accounts their husbands have, some didn’t know if their husbands received stock options as part of the compensation package, some didn’t know how much their husbands were putting into their deferred tax accounts, some didn’t know what their car and/or home insurances covered (or would not cover), some didn’t know if their husbands had disability insurance, some didn’t know how many brokerage accounts they had, many didn’t know what universal liability insurance is, and the list went on and on. Their husbands were taking care of those responsibilities and didn’t always involve their wives in the process, either consciously or subconsciously.
Throughout those conversations and discoveries many of my girlfriends expressed a lack of time to spend on long-term financial planning. I could relate in many ways. Like my girlfriends, I was happy filling my day with work, childcare, household chores and exercises. I enjoyed spending time planning social events for myself and my family. I took pride in doing interior decorating, planning for holiday gatherings and shopping for the lowest bargains (extremely time consuming).
When would I have had the time to learn about investing in the stock market, keep track of my family’s investment portfolio performance, peruse through the IRS website to reduce family income tax, learn to calculate how much life and/or disability insurance my family needs, or work on estate planning with my husband?
I’m sure if my life situation forced me to I would have done all that and perhaps more, however, my husband was taking care of all those financial responsibilities so that I didn’t have to. We were each great and efficient at what we “owned”. That was the whole idea behind the concept, division of labor, right? At least I thought so.
And I was glad my husband took upon those “burdens”. I never liked technical stuff (I used to think investing was super technical and intimidating!). Starring at lots of numbers, and big numbers, overwhelmed me.
For years, I only cared about one number, and that number was our total net worth. I didn’t care how my family arrived at that particular number at the end of each month. I only cared about the number going up. Sometimes I watched my husband calculating the numbers, and those calculations seemed messy (yes, for years he was very low-tech and he kept track of our net worth using a calculator and Notepad).
Introspection
At any point in our relationship my husband is always eager and ready to help me become as financially savvy as he is. For years I resisted his generous offer. During those years I was short-sighted. I assumed my husband was always going to be around and able to manage his part of our household’s finances. It took me a long while into our marriage to have learned and understood the various accounts he has through employment.
Further, I lacked financial confidence. I didn’t want to be responsible for investing our money. What if I made a terrible investment choice? What if I gave the wrong advice to my husband regarding which stock/fund to purchase? What if I suggested the wrong amount we need for home insurance? All these questions jumping in my head overwhelmed me, and for years I took the easy way out. Apparently, based on what I’ve read, I was not alone. For instance, the 2013 Fidelity Investments study found that women lag behind men with respect to financial confidence, decision making, engagement and approach to investing.
Thinking back, I was selfish. I let my husband take on most of the burden managing our household finances. From what I understand now, financial tracking and long-term financial planning involve lots of work and mental energy. I knew I was anxious around investing, but it never occurred to me to have taken the time and ask my husband if he was doing okay. The fact that he was happy while taking on those responsibilities doesn’t always translate into him being worry- or anxiety-free while doing so. Or was he happy?
If I had been more active participating along with him making investment decisions would he had felt less burdened? If I was at least as financially savvy as he was, would he have gladly deferred all household financial responsibilities to me? Could it be he did what he did because he knew he had to? For years I expressed no interest. I can ask him these questions now, but I could’ve been more mindful of his well-being back some years ago.
Prior to having met my husband I was pretty diligent managing my money. Once we got married, somehow, I forgot about my personal responsibility to owning my finances. I was happy having my husband taking care of our joint finances. I trusted him and he shared enough (way more than enough, according to the younger me) with me to have kept me “in the know” about our financial situations. Despite that, knowing what I know now, I would’ve told my younger self to always take ownership of my own money. No other person, besides myself, should be responsible for taking care of my finances. No one owes me that. I don’t know what got into me early in our marriage that had me think it was okay letting my personal finances become my husband’s obligation.
Despite my husband’s depth of financial knowledge through all the years together, nowadays I wish I had taken a more active role in doing financial planning with him. Whenever I gave myself the excuse that I lacked time to do financial planning, I denied myself the opportunity for learning and growth. We don’t know what’s going to happen in the future.
As I’ve learned, one of the best ways to protect myself and my family is to have a clear picture of my household’s financial situations and having the financial confidence to take over all financial responsibilities when needed. This alone, gives me all the reasons to overcome my fears and excuses and become financially competent.
Currently, financially responsibilities in our household are shared tasks. My husband still has more responsibilities doing the investing part, but I’ve gotten much more involved in our long-term financial goals. Whenever my husband wants to take a break, I have him and the family covered!
In part II of A Woman’s Financial Responsibilities in Her Household, I will discuss some of the barriers women face on our way to becoming financially literate, and how the men (husbands, fathers, grandfathers, brothers, friends) in our lives can help.
Additional sources used:
Men Dominate, But Women Gain in Home Finances
Letting Your Man Manage Your Finances?
Was there a point in your adult life when you depended on someone else managing your money (exclude paid professionals)? If so, how did that go?
How do you prioritize financial learning in your life?
What are your financial responsibilities?
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