By Ed Vargo
If you’ve read our previous articles, you know of the tendency for women to turn over “big money” decisions to the men in their lives. Big money decisions include how to invest for retirement, should you use a home equity line of credit to buy a car, how much house you can afford, how much life insurance you should have, and so forth.
Women may control the checkbook, but when it comes to the big stuff, the stuff that affects the trajectory of a person’s life, men are in charge.
I’ve seen firsthand how a woman not being in control of her money can negatively affect her life. When my parents divorced, my mother had to give up custody of her four children because she couldn’t provide for us financially. That was a long time ago, but I see similar things happening to women today, particularly when going through divorce. It’s devastating. And often avoidable.
While most women don’t think giving up control of big money decisions is a good idea, the practice remains stubbornly persistent. This is quite puzzling considering the tremendous strides women have made in the workforce and as wage earners.
At BRAG, we believe this needs to stop. Not being a part of big money decisions dramatically increases a woman’s risk of experiencing poor life outcomes. For example, women going through a divorce are more likely to be taken advantage of or out-negotiated. Widows are prone to being victimized by bad actors or living a life of anxiety for fear of running out of money.
Having an equal voice in big money decisions can reduce these risks and put women in a better position to live a meaningful life.
Men Don’t Have a Financial Knowledge Gene
I often hear women say, “My husband is just better at this stuff than I am” or “I don’t get finance like he does.” They often use this as justification for not being more involved in big money decisions.
I don’t buy it.
Imagine if I were to post the following on social media:
“Look, ladies, just deal with it; men are superior to women when it comes to finances. Studies prove it. Let the men handle things from here.”
Can you imagine the fallout? I’d be canceled in minutes.
And yet women tell themselves some version of this story all the time and are okay with it.
“I don’t get this stuff; it’s just not me.”
“My husband’s (men) better at this.”
“There’s too much math. Men are better at math.”
“My brain hurts.”
Look, I get it.
Finance isn’t the most engaging subject. It’s boring. It’s confusing. It’s not fun. All true.
It’s also one of life’s most essential skills to learn, and there’s no evidence men are inherently better at it than women. But when women engage in negative self-talk and tell themselves, “I can’t,” “He’s better,” or “It’s just not me,” they turn the “men are better at money” fallacy into a self-fulfilling prophecy.
The truth is women are just as capable of learning the fundamentals of money as their male counterparts. Don’t let anyone, including yourself, tell you otherwise.
Retain Your Financial Decision-Making Power
A staggering number of women hand over their financial decision-making power to men. A recent UBS survey found that 82% of women defer financial decisions to their spouses because they believe they lack the financial knowledge to participate. What’s more, 95% of men agreed that women lacked the knowledge to participate! Ouch.
I’ve often asked myself, why do women put so much trust in men when it comes to money? They don’t trust them to diagnose their illnesses, choose what clothes to wear, or even load the dishwasher (joking, but not joking). But then they readily turn over big money decisions, decisions that can literally affect them for the rest of their lives, without a second thought?
It’s perplexing, but there are reasons. We’ve discussed how negative thinking and self-talk contribute. At other times, it occurs without much thought at all.
Here’s an example:
In most relationships, there’s a natural give and take for household duties. She’s responsible for cleaning the kitchen, decorating the house, and cutting the lawn. He’s responsible for taking out the trash, cleaning the bathrooms, and going to the grocery store.
Deciding who does what isn’t something couples put much time and effort into. We naturally gravitate toward the things we like (or don’t mind) and bargain for/against the rest. This also happens with money.
There is a natural tendency for women to take control of the checkbook (i.e., day-to-day expenses) and men to take control of the big money decisions (i.e., investments). This happens without much discussion or careful deliberation.
The problem with viewing big money decisions as just another duty to be divided is the oversized impact big money decisions have on our lives. If you do a poor job of cutting the lawn, cleaning the bathroom, or managing the checkbook, the implications are rather benign.
On the other hand, if you do a poor job of managing your retirement portfolio or choose the wrong amount of life insurance, the implications can be devastating.
Whether you give up your financial power because of a belief system (“men are better”) or it’s the practical path of least resistance (division of household chores), the outcome is the same. Not having an equal voice in big money decisions unnecessarily increases your vulnerability and puts you at greater risk for poor life outcomes.
Be a Financial Role Model
Another thing holding women back from financial equality is the lack of female role models. We learn by observing others. How different would it be if young women were surrounded by influential women who made money talk a normal, everyday part of their lives? Do you think they’d still feel men were inherently better at money than women? Hardly.
If women talked about money openly, it would remove the stigma that talking about money is inappropriate or taboo. This is a crucial step to leveling the playing field.
We need more women money mentors.
We need more women to go first and be an example to the women in their lives. Talking about money shouldn’t be taboo. It shouldn’t be a “thing.” Wanting to take control of your financial life doesn’t make you “money hungry” or a control freak. It’s just smart.
Don’t be afraid to Go First.
I’ve been calling for this for quite some time now, this idea of not being afraid to “go first.”
It’s a simple concept: don’t be afraid to “go first” and be the first person at the table to bring up the topic of money. Good things happen when you do.
You know why?
Because everyone’s already thinking about it but afraid to say anything.
Money is a topic that’s never far from our minds. Yes, even women. When you “Go First,” you make it okay to talk about money. You make it okay for others to share their money stories, their insecurities, challenges, and frustrations. You open the floodgates for real discussion about what’s happening in people’s lives because money touches every aspect of it.
Talking about things is how you learn, grow, and figure things out. It’s a catalyst for change. It’s how you get things done.
Say what you will about the guys, but they don’t have these hang-ups around money. They have no problem talking about money or making big money decisions, even if they have no idea what they’re doing!
They approach money with (perhaps false) confidence and a willingness to wade into it. They’re eager to take control of their money. While this approach isn’t always good, there is something to be learned here.
If women tear down the walls of “money talk is taboo,” it would bring forth a sea change in how women engage with money. It would eradicate that feeling of inadequacy many women have when it comes to big money decisions. They would be a part of important, often life-affecting decisions and ensure their needs were taken into account.
An equal voice at the table. It doesn’t sound like too much to ask, does it?
Let’s Change the Conversation Around Money
At BRAG, we are committed to changing the way women view money.
Money is not a taboo subject. It shouldn’t be avoided or talked about in hushed tones.
And you shouldn’t expect to talk about money like a man. Men love to dig deep into the numbers and review reams of spreadsheets, statistics, graphs, rates of return, correlation coefficients, etc.
Good for them.
We want you to think like a woman. Women want to know how their money can be used to enhance their life, support their children and family, and avoid having to work forever. When discussed this way, women are eager, even excited, to talk about money. It’s anything but boring financial-advisor-speak.
Burning River Advisory Group is here to help you achieve financial independence. Reach out today to find out how we can help by calling 216-404-2420 or emailing evargo@burningriverag.com.
About Ed
As Founder and CEO of Burning River Advisory Group (BRAG) and enlightenHer, Ed’s mission is to help women take control of their money and to live their version of a meaningful life.
As the father of five daughters, Ed raises his girls to be strong, independent, formidable women. He believes being knowledgeable and in control of their money is essential. Ed is committed to teaching them how to be empowered by money, not weakened by it.
Ed takes this mindset into his work. He’s passionate about helping women take control of their financial lives once and for all. He created the Servant Money Method (SMM)™, a proprietary financial life planning process designed to give women the ability to live a meaningful life without a money anvil hanging over their heads.
Whether that’s exiting the rat race before burning out, starting over after a difficult divorce, moving closer to be near the grandbabies, or simply sleeping better at night knowing they’re not going to outlive their money, the SMMTM takes the financial “heavy lifting” off their clients’ plates so they can focus on what matters most: pursuing a meaningful life.
Ed’s clients know their success is at the forefront of all he does, and he works tirelessly to advocate for them. He strives to be their “first call”—the person they turn to when they need objective advice, accurate information, or a calm and experienced voice to help them through tough times.
Ed believes we should use our money to make a life instead of using our life to make money. His values-based mission allows his clients to do just that.
