A recent study by Fidelity Investments has uncovered some intriguing paradoxes about women’s relationship with money.
Despite the fact that 92 percent of the women involved in the study want to learn more about financial planning, and 83 percent want to get more involved in their finances in the next year, a whopping 80 percent admitted that they have refrained from discussing money with family and friends.
In addition, only 47 percent feel confident when talking about finances with a financial professional—compared to 77 percent who would be comfortable discussing medical issues with their doctor.
Where does this disconnect come from? Why are women eager to learn more about money, and yet reluctant to discuss it?
Fidelity’s study found that there are some common factors that make women closemouthed about financial topics: privacy worries and lack of confidence.
56 percent of respondents who have refrained from discussing finances with friends or family kept mum because money was “too personal,” while 35 percent didn’t want to share financial information with those they were close to, and 27 percent were raised not to discuss finances.
In addition, 32 percent of women feel uncomfortable discussing money, and 16 percent feel that the issue is taboo. 26 percent claim that the topic never comes up in conversation.
In short, it’s really tough to talk about money when we are socialized to keep this kind of information private.
Of all the reasons why we do not discuss finances, this is one of the most difficult to overcome. We worry that talking about money will make us vulnerable, make someone feel bad, or simply cross a tacit societal boundary—and those worries are not without merit.
So how do women overcome their financial reticence? Fidelity makes a couple of excellent suggestions for introducing financial conversations into your life without feeling overexposed:
- Find a Financial “Buddy”:By making time on a regular basis to discuss financial matters with a trust-worthy friend, family member, mentor or financial expert, tackling financial goals can become less overwhelming and more attainable. In the same way that “gym buddies” keep each other motivated, financial confidantes can help both parties make progress and stay accountable.
- Join an Online Conversation:Take advantage of online conversations with other women looking to get more involved in their finances, as well as experts providing insights and guidance.
Both of these options allow those who are interested in becoming more financially proficient to start and join conversations without feeling exposed.
Lack of Confidence
In addition to privacy concerns, women often have difficulty talking about money because they assume they do not know enough about the subject. 14 percent of respondents worry that talking about money would be a waste of time and 10 percent feel as though they do not understand finances well enough to talk intelligently about it.
According to Kathy Murphy, president of Fidelity’s Personal Investing:
“Beneath women’s reticence to talk about money lies a lack of confidence in their knowledge of financial planning and investing. This lack of confidence is really self-imposed. Our analysis of more than 12 million investors shows that women actually demonstrated stronger saving rates than their male counterparts and enjoyed better long-term investment performance when they did engage. Unfortunately, too many women still hesitate to take control of their finances.”
That confidence gap can feel like a Catch-22: you feel foolish for not knowing things, but asking questions feels too intimidating. So you continue worrying in silence and assuming you don’t know enough to talk intelligently.
But women have mastered many important money skills that they often tend to discount. According to Fidelity’s study, 82 percent of women are confident in managing their day-to-day budgets, and 74 percent are proactive about saving for the future. Women who are hesitant about making investment decisions simply need to build on the financial skill set they already have. Fidelity suggests several ways to do so:
- Kick-Start Your Financial Education at Your Own Pace:There are numerous tools, tips and reference materials online which can help women boost their financial knowledge to the next level.
- Take Advantage of Workplace Retirement Guidance:Many employers offer on-site financial workshops and guidance, yet the study shows that sixty-five percent of women are not taking advantage of retirement guidance made available to them through their workplace plan provider. Check if your employer offers onsite financial workshops or 1:1 guidance, sign up if available, or contact a financial services provider directly.
- Work with an Expert:A financial professional can be a valuable resource to turn to with questions and to help build a roadmap for the future. When choosing an adviser, look for a good listener who communicates clearly about fees, professional designations, and investment advice. Interview the adviser before you make a commitment, to make sure you are comfortable and can build strong working relationship.
The good news is that women are poised to take charge of their financial lives. Fidelity has shown that the majority of women already have great self-discipline when it comes to saving for the future—and they can apply that discipline to investing. According to Murphy, “The key is to take action now to ensure that your money is working just as hard as you do, so you can achieve the goals and live the life you deserve.”