By Dr. Disha Spath, WCI Ambassador
Women don’t usually talk about money. Get my five or six close friends together for a dinner and the conversation doesn’t end. Usually, it’s hard to get a word in edgewise. We have so much to talk about! We talk about everything—our kids, our jobs, our relationships. But, we don’t talk about money.
I wanted to change that. So, I hosted a “wine tasting and money happy hour” at my house with a few close friends. We had a jar of conversation starters with questions like, “What would you do if you won a million dollars?” or “How expensive an item would you buy without talking to your spouse?”
Before the event, I thought I would have to provide a little encouragement to get the conversation started. But, truth be told, it was hard to call an end to the night. There was so much to talk about! And it was so needed. We finally got to talk about a topic that we had neglected for so long but was such an integral part of our lives. We spent a few hours together talking about money and finance before heading home to our kids. It was glorious.
Over the years, I have spoken at many conferences directed toward women physicians. Through those experiences and my recent happy hour, here are some of the overarching themes I have gathered about money and women.
#1 We Stress About Money
A lot of us lose sleep at night thinking about our financial situation. We scrimp and save wherever we can, usually by cutting the spending on self-care. But oftentimes we don’t know how to get started with managing our money.
#2 We Think Investing Is for Professionals
We are good savers and a lot of money advice directed toward women is about saving (I’m guilty here), but we don’t realize we are also already investors (in our 401(k)s or 403(b)s). In a recent study by Fidelity, we learned that while women feel confident being the CFO of the household and managing day-to-day finances, only 1/3 of women see themselves as investors. But an analysis of more than 5 million Fidelity customers over the last 10 years found that, on average, women outperformed their male counterparts by 40 basis points or 0.4%.
As a result of our disbelief in our own skills, we often end up handing over our accounts to others and paying too much in fees that cut into the magic of compounding interest in our accounts.
More information here:
How to Improve Your Returns? #InvestLikeAGirl
#3 We Think More Money Is More Problems
An interesting theme that emerged during my last money happy hour was when attendees were asked what they would do if they won $1 million. Most said they would not know what to do with it. Some even said they might decline it.
#4 We Are Motivated by Helping Our Families
Oftentimes, when I talk finance or try to encourage women to learn about finance, the concept of financial independence or even a high net worth doesn’t spark interest. But talking about setting up our families and kids for success by investing in 529s or creating generational wealth by investing for them in Roth IRAs does get women excited about learning about investing. My story is similar. While financial independence was a concept I was familiar with, spending more time with my sons and setting them up for a stable and prosperous future was the actual impetus for me to learn about equities investing.
More information here:
How I Teach My Kids About Money
#5 We Are the Sandwich Generation
As professional women, we are in the position of taking care of our kids and our parents. This involves so much more than actual caregiving. This involves money. It involves planning for daycare, college, and all the expenses in between. As the healthcare voices of authority in our families, we are also often put in charge of estate planning, care planning for elderly parents, and executing wills. We are often woefully unprepared for these responsibilities and are shoved into these roles when it is a little too late to talk about it with our parents.
#6 Building Up Our Relationships with Our Spouses Is Very Important to Us
In my last happy hour, all the women earned more than their spouses. They really did not want to make their spouses feel bad about that. So, they didn’t talk about money at all.
More information here:
Going from Broke to Financially Fit in Just 5 Years
These are my experiences after talking to a small cohort of women in medicine about finance. So, please feel free to chime in if you have different experiences in the comments. What I find interesting is that the solution to a lot of the problems identified above is readily available on this blog and other finance websites. The cure for money stress in relationships and in general is a good budget and a regularly scheduled budget date. The cure for helping with the struggles of the sandwich generation is having conversations with our parents about advance care planning and estate planning, long before they think they need it. And the cure for helping us get started in investing is learning about index fund buy-and-hold investing, the magic of compounding interest, and the importance of having a written financial plan.
Why isn’t the word getting out to women? Well, I’d like to change that.
Have you ever wanted to break the ice, get real, and talk about money with other medical professional women like you? How are we investing? How do we get our spouses on board? What do we outsource? There is so much we can learn from each other! So, grab your favorite beverage and meet us for our Girl Talk Happy Hour: Let's Talk Money! virtual event on Friday, September 23 at 6pm ET (come join us whenever you get off work). No judgments, no mansplaining. Just real women talking money. Plus, don't miss our free swag giveaways at this event. Sign up here today. We can't wait to see you there!
I hope to have a lot more virtual money talk happy hours with women in the future. Our families will thank us for it. After all, there is so much to talk about.
What other themes about women and money would you add to my list? Do you think these behaviors can be modified? Do you think talking it out with other women can help? Comment below!
It also drives me crazy when women automatically compare childcare costs with their income only, rather than considering it as a joint expense between both working spouses. In relationships where the woman is the higher earner this might not happen, but this logic also should not be applied to the lower earning male either. If both parties enjoy their work childcare costs should be considered a shared expense that is an investment in their future ability to earn an income. Women who opt out of the workforce while children are young never catch up in terms of earning potential if they choose to re-enter once kids are older and in school. I would also like to see high earning women re-frame domestic outsourcing as “I would rather do my highly skilled job and pay someone to do the laundry than cut back on my hours so that I can do tasks that don’t even require a high school diploma.” If women or men do WANT to cut back for whatever reason and have the economic capability to do so, great! I plan to go part time in the future because I do see myself wanting more time w my kids. But to use the “I barely made any money after childcare costs” reason ONLY is both shortsighted and sexist.
Fair point. I think the idea behind the comparison is that if one parent weren’t working, there would be no child care costs. So what they’re REALLY making is the after-tax, after-child care salary. That’s the number that should be looked at when deciding whether and how much to work. But there’s no reason it should only be applied to women. It could just as easily be applied to men. Probably best to apply it to whoever the lower earner is, but that whole comparison assumes the lower earner is actually willing and desirous to stay home with the kids instead.
The key for me is the desirous part. I think women in particular if they’re the lower earner are more prone to feel guilty for working even if they love their job due in part to the cost of childcare. They feel that working is selfish, even if there are clear economic upsides to the family. But if both parents would rather go to work at least some of the time than stay home all of the time, it doesn’t make sense to say that the childcare all comes out of the lower earner’s paycheck. Often the equation also doesn’t take into account the parents’ long term earning potential and whether a 30 year career would end up being more positive financially for the family even if a lot of money is sunk into childcare in those early years.
Excellent point about long term potential.
I often recommend to young college graduates, usually female, the book getting to 50/50 which says exactly what you did, that 3 to 10 years of child care is a worthwhile investment in a 40-year career. The other one I recommend is the price of motherhood, which points out that no divorce court will compensate you for the loss to your career if you sacrifice it a great deal more than your children’s father does.
“I would rather do my highly skilled job and pay someone to do the laundry than cut back on my hours so that I can do tasks that don’t even require a high school diploma.”
I was on board until the last part of this comment. The key to any partnership, financial or marital or otherwise, is valuing what participating parties bring to the table, and not making it a contest about who makes more money or who is the most educated. I know you were talking about outsourcing here, but it’s this very language that contributes to class and education hierarchies and discrimination in families and society. Instead of viewing household duties as “tasks that don’t even require a high school diploma” perhaps it would be wise to value these contributions as essential and respect the people who do them as equal to oneself. My husband certainly cleans more bathrooms and does more laundry than I do, and I happen to currently make more than he does. It’s neither here nor there; both contributions are essential and valued. If we ever decide to outsource some domestic work, hopefully we do not look down on those less educated and less fortunate than we are.
Regarding number six my wife makes more money than me and I think that’s fantastic! I feel more awesome that my wife makes more than I do! please let the ladies in your happy hour know that most men do not feel bad if their spouse makes more than them. At least in my circle of friends we do brag about it when our wives make more than us. Wives making more than their husbands should not be a reason to not discuss money.
This is the first time I was actually kind of offended by an article posted on WCI. Here I am, a woman who has been reading WCI and successfully managing my household finances for years, and I’m presented with an article telling me that women generally don’t know how to get started with managing our money and don’t even understand what investing is! This article made me feel like WCI isn’t even aware that women read and follow the advice on this and other financial websites.
I know the author gives the caveat that these observations are based on her own small, personal sampling of conversations with friends and people at conferences, but c’mon, that’s like me writing an article about how a lard smoothie diet cures diabetes based on the fact that several of my friends swear by it. This article seems like it really should have been titled “6 Things People Who Don’t Know Much About Finances Believe About Money.” I don’t see how fear of or ignorance about finances is specific to women.
I think we’ve come full circle. Now we’ve had a man offend men, a man offend women, a woman offend men, and now a woman offend women. We don’t discriminate; we hate everyone equally!
Seriously though, thanks for the feedback. We do listen to it, we do use it, and we try to continually improve as we go. And yes, we certainly are aware that women read and follow the advice and we appreciate them, just like all our other readers.
I agree with this. There are so many misperceptions about women and finances. It’s actually more offensive that this article was written by a woman that is financial savvy!
Thanks for your feedback! This article was written about regular doctors I have met that are not white coat investors, yet. These myths certainly do not hold women WCI readers back because we are here reading, learning, and implementing all the teachings! But, unfortunately, we are a small minority of women in medicine. There are so many out there that need to be exposed to this information or simply need a support group. One of the reasons I’m starting these happy hours is to help introduce more non-WCI women to the good word and to help close the gender gap in wealth building. So come and bring a friend who doesn’t know WCI yet!
Disha
I enjoyed the article. It’s nice to hear another voice and as a woman who makes more than my husband, I saw nothing to be offended about. I’m getting to be a dinosaur, but these concepts weren’t discussed at all while I was training and I only discovered helpful financial blogs in the last 5 years. And I have very few in my social circle with whom I can discuss these matters frankly.
I think the happy hour idea sounds like a lot of fun. Here’s a glass of ginger beer to you, Disha!
Cheers Nebraska! Thank you for your kind words and for understanding my intent. I look forward to speaking more with you at happy hour!
Disha
Seconding Rikki Racela’s point above. My husband has always been thrilled when I’ve earned more than him or more than I previously had! To any single career-minded women out there, I’d seriously consider your potential spouse’s feelings about your earnings before making a commitment. Being successful is stressful enough with your spouse on your side!
Disha, thank you for being vulnerable and sharing your experiences while recognizing that your experiences won’t represent all women. I do want to point out that almost every women-targeted financial post seems to focus on motherhood; there are a lot of high-earning women who are not mothers (it’s among the circles where it’s most normal not to be a parent).