Uplifting women’s role in family finances
Can your financial plan survive the unplanned?
September 12, 2021
Going against the norm this valentine’s day
September 12, 2021
Women have inherent qualities that enable them to effectively plan their own and their family’s finances
In conjunction with International Women’s Day this March, my team and I were thinking of organising a special workshop for potential female clients who had called in recently for enquiries. Over the course of going through our prospect list, it struck us that the number of female callers compared to male callers was lower than expected.
One of our advisers remarked that it was not surprising, normal even, to encounter that a majority of men rather than women would initiate financial planning services. While money matters being in the domain of males may be true half a century ago, in this day and age where society and social media positively and repeatedly affirms gender equality and female empowerment, old stereotypes and role differences may no longer hold true.
In my financial planning practice, I have observed that female clients, whether they be single career women or married with children, tend to face similar dilemmas and challenges when it comes to planning their personal finances.
Lack of time due to multiple roles:
There is no denying that the modern-day woman is extremely adept at multi- tasking – from her job, her family, her children’s education to other social obligations and so forth. The downside of assuming so many roles and responsibilities is that it leaves hardly any time for herself at all.
Any precious moments of “me-time” that ladies can manage to squeeze out of their packed schedule goes towards rest and de-stressing to rejuvenate themselves. Financial planning issues will hardly be on their minds after a long day.
Tendency to prioritise family rather than themselves:
Being selfless and filial are undoubtedly noble characteristics that every parent, husband or sibling would want their daughter, spouse or sister to have. However, when putting the interests of family members ahead of your own, more often than not, your own needs may be neglected.
A sense of apprehension when it comes to managing money:
This can be real, imagined or selective. Numbers and calculations can be intimidating to certain individuals regardless of gender or age. Others tend to shy away from money matters because they find it too complicated and confusing, preferring to let their spouse handle it so that they can focus on other responsibilities.
My wife is happy to help our son with his algebra and trigonometry, but she claims to make no sense out of a financial spreadsheet.
Decision making guided by sentiments and emotion:
Female clients sometimes base their decisions on how they “feel” about something, and while having keen financial gut instinct has been known to make many billionaires, it is another thing when the heart overrides the mind in making investment decisions.
Examples would be putting money in investment plans because a friend “strongly recommended” it, or out of sympathy for your banker whom you known for ages and needs to meet his/ her sales target.
Choosing to save rather than invest:
Some individuals make a conscious decision to continue saving in cash, preferring to keep the bulk of their money in fixed deposits despite the dismal returns. They are in fact aware and fairly well informed of their options but due to their position in the family (for example being the only daughter or the only unmarried sibling), they feel a sense of duty or responsibility to have funds on hand to assist other family members should they require it urgently.
Taking on the status of the family’s “standby banker” no matter how well-meaning, denies some women the opportunity to plan for their own financial future. Instead of viewing these challenges as barriers, turn them into catalysts for your personal financial growth instead. There are many ways to empower oneself in order to take control and own your financial destiny.
Reprogramming the mindset and be prepared:
While you may currently have the luxury of someone else handling the household’s financial matters for you, i.e. your spouse, there may come a time where you need to take over or assist in those duties. If you are already prepared, well and good. If not, take time to increase your own financial literacy so that assuming the role of the home’s financial manager will be a comfortable transition.
Be heard and be more involved:
If money matters are not exactly your cup of tea, it may be tempting to leave all the family finances to someone else especially if things are running smoothly and the party handling it has the necessary expertise and experience and doesn’t seem to mind doing it. However, you may very well have insights and suggestions for improvements so share your thoughts rather than keep them to yourself.
Make it a learning process:
If your financial matters are currently delegated or outsourced to other parties, there is the danger that you may one day find yourself in a situation where this party is unable or unwilling to continue the responsibility. Thus, it is important to get yourself educated on how to handle your own personal finances rather than leaving such a crucial task entirely to someone else.
Leverage on other people’s time:
If you find yourself already overwhelmed with work and other obligations, learning to put your personal financial matters in order from ground zero may seem like a mammoth task. Under these circumstances, a licensed financial planner would be able to work togetherwith you and assist you through the entire process while ensuring your involvement every step of the way.
Individuals are not born with good personal financial skills, but everyone can learn how to be competent at it. Due to personal and family circumstances, women are often unable to take advantage of the opportunities present to improve their financial knowledge and be as hands-on in their personal financial matters as they would like to be.
Nevertheless, women already have a natural advantage to take on the role, thanks to two very critical attributes that play a huge part in successful financial planning.
Firstly, almost all women regardless of age group, education level or social strata, have an inclination towards a long-term mindset in whatever course of action that is decided upon. This is usually more evident when it comes to buying a vehicle for example, or renovating a home or planning for the children’s education. Rarely are decisions made by women in the household without thinking two or more steps ahead about the effects and implications, contrasted with men like many of us who are more prone to “act first, think later”.
Secondly, women tend to err on the conservative side compared to men by questioning downside risks before taking action, which is actually a good thing. While profit and returns are typically top on the list of male investors, having a woman jointly involved in the investment decision would help to temper any hasty actions and mitigate potential financial risks.
As such, it is precisely these inherent qualities in women that make them suitable candidates to plan their own and their family’s finances. With guidance and financial education, they have the potential to surprise even themselves.
A household may have mixed styles of financial management as both men and women are good in personal finances in their own ways, therefore by complementing one another and learning from one another, amazing results can be achieved.
First published in Smart Investor 03, 2020 Issue
Felix Neoh
Director of Financial Planning at Finwealth Management Sdn Bhd
