Women experience the world differently, and this is not recognized in the traditional financial industry.
We can see ways that women have been excluded from taking an active part in their own finances through sexist practices in the legal system. Women were not allowed to get their own credit cards until 1974 when Congress passed the Equal Credit Opportunity Act. In many states, it remained impossible for women to keep their names when they got married, own property without their husband, or start a business without their husband’s legal consent until the 1960s.
The repercussions of this institutionalized sexism still persists today. For example, 65% of US student loans are taken on by women who account for 56% of degrees earned, but when it comes time to repay those loans 34% of women in 2016 were not able to afford basic living costs.
Things don’t become better for those women who choose to become parents. Although 40% of moms are sole breadwinners, they earn $0.74 to every $1 that dads earn. In households with two mothers, that impact is doubly felt.
Though we may think that women now have the freedom to make their own choices, there are still countries which allow husbands to legally stop their wives from working. While not widely discussed, intimate partner violence disproportionately affects women and results in lost earnings of $6 billion in the United States.
Women are made to feel excluded in more nuanced ways through microaggressions. Though it may not always be the case, it is not uncommon for women - both single and in a relationship - to feel patronized when visiting a financial advisor. According to Investopedia, over 70% of women seek a new financial advisor after the death of a spouse and many single women feel as though the advisor treats them as if they are clueless.
While women are the main money managers in most families, financial advisors often tell female clients what they need and expect them to take this information without question. Situations like these do not align with what women are seeking, which is an ongoing relationship of both listening and teaching.
Some have questioned whether the 2008 financial crisis would have happened if Lehman Brothers had been Lehman Sisters. Women and men have shown to invest differently, with different returns.
First, women and men have different definitions of wealth generally. According to a Fidelity study, men associate the word wealth with “success” and “power”, while a majority of women associate it with the word “security”.
Women will more readily admit when they do not understand a financial concept, which leads them to doing more research as a result. They will seek advice from many sources and deliberate before selecting an option. According to John Coates, a neuroscientist at Cambridge University, high levels of testosterone lead to high levels of risk-taking. It also increases a person’s confidence level and increased sense of invincibility, which encourages investors to follow what others are doing. On the other hand, women’s decreased level of testosterone allows them to consider options before taking action and thus making fewer emotionally charged decisions. These may be reasons why women were less likely to abandon equities during the turbulent markets of the 2008 financial crisis.
My passion is to make women feel empowered to make financial decisions today that will positively impact them for years into the future. My aim is not to tell people what is right for them, but to look at situations critically and ask the probing questions that will you determine what is right for yourself.
I cannot count the number of conversations that I have had with women where they have expressed to me that they did not feel enabled in situations having to do with their money.
I may not always be able to be in the room with you when you are talking to your bank about refinancing your mortgage, or your lender when you are navigating paying back your student loans, but my goal is to equip you with the confidence to go into these situations knowing your options and pursuing your choice because it is what you have chosen because it meets your goals.
These concepts do not have to be as scary as some would have us believe. You don’t need to have all the answers to get started. The most important think is to start learning, start questioning, start experimenting. You can take control. It can be fun, I promise!