Breaking the Cycle of Financial Abdication

Women must either assert their role in wealth management, or court disaster.

By Susan Freeman

I will never forget the day my father died. It was Dec. 30, 2002 at 8:30 a.m. An undetected condition resulting in aortic dissection claimed his life at age 66. He was less than two years into retirement. It was sudden and reportedly painless for him. For my family—my
mother in particular—it was a day of unimaginable grief, shock and fear.

If you’re a husband, you should include your wife in all investment and planning conversations. If something were to happen to you, you’d want her to feel confident and comfortable about her future.

During their entire marriage, Dad managed the money. He paid the bills, budgeted expenses and handled the investments. Mom never had an interest in money and was quite willing to let him handle this responsibility. This all changed that late December morning.
I will never forget her words: “I don’t know where our money is. Do I have enough money to bury him?”

Mom’s situation was hardly unique. Why are women who today are more educated, more successful and more outspoken than
ever leaving major decisions about money to someone else?

UBS surveyed nearly 1,700 married couples to find the answers.  The research revealed many reasons for women’s abdication, from
historical and social precedents to family, gender roles and confidence levels. Most of the widows in the study participated in some financial decisions while married. Regardless of their level of engagement, most agree it wasn’t enough. Six in 10 widows
and divorcees regret not participating more in long-term financial decisions and they hold themselves accountable. Even women who say they were
meaningfully involved wish they had done more.

Gender roles, ingrained from early life, often prove hard to shake. Men, for example, are still seen as financial providers; 71 percent of women surveyed want their husbands to provide them with a sense of financial security, and 87 percent of men expect to provide their wives with a sense of security. In many cases, married couples are simply imitating the gender roles they witnessed growing up. Most saw their mothers take care of the day-to-day finances and fathers handled the investing.

Within families, 70 percent of men are the main breadwinners, in part because of the gender pay gap and the career breaks women take to raise children. Most men say it feels natural for them, as the breadwinner, to make major financial decisions for the family. Yet when roles are reversed, and women are the household’s main provider, 43 percent still leave the major financial decisions to their husbands.

Whether married or not, women have many demands on their time. They take on the majority of household duties, including
childcare and chores, as well as paying bills and tracking expenses. 

History and society have conspired to affect women’s financial confidence. Many women may underestimate their own abilities, while overestimating what is required to be financially involved. In reality, taking an active role in household finances does not
mean becoming an expert—it simply means becoming more engaged and aware.

UBS’ research suggests that shifting a person’s thinking about one’s financial life is a form of self-care, similar to committing to a healthier lifestyle, and can enable one to break the cycle of allowing others to
call their financial shots. 

Take the time to add up your assets and liabilities, like loans and other debts, and ask for full transparency from your partner. Husbands, start including your wife in the investment and planning conversations. Eight out of 10 women end up on their own, so if something were to happen to you, you would want her to feel confident and comfortable about her future.

Think about wealth along three lines:

  • Liquidity (Cash-flow needs for the next three years).
  • Longevity (4 years to a lifetime—Spending needs for your retirement, health care, travel, etc.).
  • Legacy (Needs beyond your own)

Working with a financial adviser allows you create your own unique financial road map. Simply having a plan can be incredibly empowering.

As Mom began to find her own place after Dad’s death, she began to make little changes in her life. The taupe decor he preferred gave way to more vibrant color accents. Mom traded in her ancient Buick for a more compact Toyota, and I assisted her in taking an active interest in her wealth-management future. Her growing confidence was revealed when she bought her dream home in Tucson, sold her KC home and relocated within a matter of weeks. Today, Mom is empowered, energized and enjoying a happy, active and secure retirement. 

So take control of your financial future.  You will be glad you did.

Susan Freeman is a financial adviser with UBS Financial Services in Leawood, Kan.

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