5 Reasons why women rock at managing their finances
We have noticed an increase of female clients in our firm over the past 24 months. Whether this is as a result of women becoming more engaged in the financial planning process or whether it is because we are an all-female firm I’m not sure, but I suspect it is a combination of both.
Although the increase is encouraging it’s not enough. It is known that women are still under pensioned (the CSO indicates that women are 80 per cent more likely to be impoverished at age 65 than men) and under insured (according to the Irish Life 2018 claims history there were more claims for men (54%) versus 44% for women ). We all know about the wage gap, it’s been well documented and it persists. Perhaps what we didn’t know is that according to a UK wide survey conducted by Halifax, this inequality exits from a young age with reports in the amount of pocket money given to children is that boys receive 13% more than girls.
We know women live longer than men and are more likely to live alone at some point in their lives and need to manage their reserves. Women may have gaps in their employment as they take time off to rear children or care for ageing parents. Women are also inclined to have lower account balances than men.
The idea that the men are the breadwinners is outdated as is the idea that women are not best placed to make financial decisions. As a matter of fact, in our view, once women engage in the Financial Planning process, they are very effective at managing their money. Although there may be nuances in the way women and men think, whatever the ‘why’ is, there is a strong underlying emotional component to money decisions and women are often more in tune to this.
It is our view that the biggest hurdle for women to take an active role in financial planning is not in their ability to manage money but in their confidence in their ability to achieve their financial goals. If is for this reason I was prompted to write this article because we see a number of reasons why women should be more confident as not only are they naturally good at financial planning they rock at it!! Here’s why.
- Women are very willing to be educated. A recent Armetis Strategy Group study showed that younger women feel strongly that they have received more financial education and are more attuned to financial decisions that their mothers were.
- Women are organised and are naturally good at budgeting and prioritising this is evidenced as traditionally they manage the household expenses on a limited budget.
- Women are generally not competitive in nature and therefore not inclined to allow behavioural biases affect them when it comes to financial decisions and investing albeit when they start on the investment journey they need support and coaching in terms of taking on more risk.
- Women have a lot of self- control and are not inclined to dip into long term investments.
- Women take time to weigh the pros and cons of their decision and are generally quite calm while making a critical choice. This attitude helps ensure women make rational financial choices that have a long-term impact on their financial well-being.
As we celebrate various achievements of women on International Women’s Day, as Financial Planners, can we also support and encourage more women engage as decision makers. Be sensitive to women’s time constraints and manage details women don’t have time to attend to. Create a safe place for questions and provide honest answers. To have a speak up/listen up culture for client engagement. This awareness on our behalf will help women to accelerate their pace of growth, happiness and financial well – being.
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