Why do Millennial Women Defer Financial Planning to their Male Partners?
Many of the most educated and high earning women don’t participate equally with their male spouses or partners in their joint financial planning. This remarkable finding, from a study conducted by UBS, also found that among high-earning millennial women surveyed, 54% said they deferred long-term financial planning to their male partners, as compared with 39% of baby boomer women. From the women cited, the primary reason for this deferral was that male partners knew more about finances. Another startling revelation discovered that only 79% of millennial women, compared with 89% of baby boomer women, saw the value of financial participation and its contribution to equality in a relationship.
Women’s financial circumstances are precarious now, more than ever. The pandemic has highlighted female vulnerability in the workforce, according to the National Women’s Law Center. Out of 1.1 million people leaving the workforce in September, 80% were women. A study conducted by McKinsey & Co. found that a third of mothers considered scaling back their jobs or exiting the workforce altogether as a result of not finding adequate childcare during the pandemic.
In general, women want to be a part of the discussion and do not want to be financially dependent on their partners. In a separate UBS survey, 64% of married women said they have an increased interest in discussing financial planning as a result of the pandemic. UBS began extensively researching women’s involvement in financial planning in 2018, citing that 8 out of 10 women will end up solely responsible for their financial wellbeing in their later years. This is because women typically live longer than men, and when their male spouse/partner passes away, they are left alone to handle finances.
While much of the discussion on female equality in the workplace is focused on increasing females’ salaries, experts say there should also be a focus on how that money is utilized and applied to long-term financial goals. There can be more gratification with a 10% salary increase, if women are aware how that money can be made useful or how it compounds in their retirement accounts.
The studies suggest the importance of women talking with their spouse/partner and setting up a plan to increase their involvement in financial planning. One helpful strategy would be to determine a routine meeting time, at least once a month to start. This offers the opportunity for both partners to discuss long-term goals, planning and options for facing potential adversity.
There are many resources available to encourage women to financially plan and invest. Choosing the right advisor is critical in helping both partners understand options and what is needed to protect and secure financial well-being.