Women and money: Taking control of your personal finances

But when it comes to our finances, women appear to be less in control. A 2021 survey of high-net-worth individuals by UBS Group, a financial services firm, found that just one in five couples make financial decisions together. In addition, more than eight in 10 women defer to their spouses because they believe they lack the knowledge. And more than seven in 10 women say they have neither the interest nor the time to participate in financial discussions.

An unequal partnership: Why women defer financial decisions to their spouses

It may surprise you that high-earning women aren’t in charge of, or at least sharing equally in, household financial decisions, but these findings align with what we see frequently in our wealth and family office practice at Rubach Wealth. Our client roster includes many highly successful women, most of whom run their own businesses or are top-performing professionals. They’re smart, dynamic and hard-working. At work, they’re definitely the boss—so why aren’t they also the boss with their personal finances?

There are a number of reasons. Many high-performing women are burned out from the stresses of long hours at work and, in a lot of cases, having to put in a “second shift” when they get home, caring for kids and maybe aging parents, as well as doing the bulk of housework. They don’t have the time nor the energy to manage the money, too.

In many households, male partners assume it’s their role to take charge of the family finances—including budgeting, spending and investing—and letting them do so may seem like the easier, conflict-free path. Sometimes, women who are more financially successful than their partners choose to relinquish oversight of the family finances as a way of equalizing power in the relationship.

There’s also the matter of financial literacy and confidence in making money decisions. Sometimes, women are compelled to learn money management by a sudden change in life circumstances, such as divorce (grey or otherwise) or widowhood. My own mother—a very strong, intelligent and capable woman—did not have the financial knowledge nor the belief she could handle money matters, so she deferred completely to my father. When he died at age 50 with no will or estate plan, my mother had no idea what assets or debts he left behind. For the first time in her life, she had to figure out our family’s finances, and we all struggled during this difficult time.

While studies suggest financial literacy increases as incomes rise, women still tend to be less confident about their financial knowledge than men. This may be due, in large part, to a lack of practice. In a Statistics Canada study based on data from 2014, researchers found women scored lower in financial literacy when their partners handled the long-term management of the family finances.

How a financial advisor can help

It’s time for women to take charge of their finances or, when there’s a spouse or common-law partner involved, at least be equal partners in the decision-making. The happy paradox of taking command of your finances is that you don’t necessarily need to have all the answers or do all the work. Finding the right advisors and partners—and being willing to delegate and share in the decision-making—is key. High-performing women already do this in their business or profession, and it’s a big part of what makes them successful and effective leaders.

Working with a financial advisor to create a financial plan is a step in the right direction, but it’s important to choose the right professional—one who will listen, not dictate, and who will build your plan through a holistic lens. If you’re a mom, for example, your financial plan needs to map out the transfer of wealth to the next generation, supported with a strategy for helping your children manage the gift, and potentially the burden, of their inheritance.

If you’re in a relationship, it’s also important to find a financial advisor who is inclusive when working with couples. I’ve heard many complaints about advisors who direct questions primarily to the male half of the relationship while advising the woman—often in the guise of a joke—to cut back on her shopping.

Start building a financial plan today

Whether you choose to work with an advisor or go the DIY route with your financial plan, it’s critical to take action today. If you have a partner, sit down and have a conversation about your finances. Articulate your desire to be more involved with the family finances, or at least to be better informed. The latter is an important distinction to make: if your personal preference is to leave the planning and decision-making to your partner, then that is your choice to make, and it should be respected. But you still need to make sure you have a grasp of your complete financial picture. (Remember what happened to my mom.)

Once you’ve had this initial talk with your partner, keep the conversation going. Have a regular sit-down to discuss your finances. If you have a financial advisor, you should be meeting at least once a year to review your financial plan, as well as around any major life events such as buying a new home or cottage, or selling your business. If you haven’t yet made a will and estate plan, then take care of that, too—these steps are all part of a holistic financial plan.

I understand that running a business or working in a demanding profession takes up a lot of hours in your schedule. And yes, building a financial plan requires a significant investment of time—you need to gather all the relevant information and documents, determine your financial goals, consider how these goals align with your personal values and objectives, and create a path for achieving them.

But doing it today means you don’t have to worry about it tomorrow. When you have fewer worries, you’ll have more mental space and time to devote to your career—and keep smashing that glass ceiling.

More about women and money:

• 5 great personal finance books by women
• Video: How do we close the gender wealth gap?
• Taking control of your finances with confidence
• Jessica Moorhouse on asking for a raise and what she’d do if money were no object
• The Pink Tax author Janine Rogan on how she stopped impulse buying and started building wealth

About Elke Rubach

Elke Rubach is the president and founder of Rubach Wealth, Holistic Family Advisors, a wealth management firm in Toronto that provides comprehensive financial planning for business owners, established professionals and their families.

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