Having spent a weekend speaking to over 2000 young women about their finances, the most tweeted comment was “a man is not a financial plan”. This statement resonated not only with the young women in the audience but many of the men working at the event. The men were very excited to go back to their girlfriends and wives and inform them that they were, in fact, not a financial plan after all!
Although the young women cheered and clapped, I suspect there were some in the audience who still secretly believe that marrying a rich man will take care of all their financial worries.
This stems from a woman’s unconscious need to be taken care of, described by American psychologist Colette Dowling as the Cinderella Complex after the fairy tale in which a poor, dirty orphan is miraculously turned into a princess when the handsome prince falls in love with her. (Someone must name the complex which makes men unable to change a baby’s nappy without gagging!)
As liberated as many women believe they are some still hold the belief that a man on a white horse will come and save them. Even if you are financially independent do you sometimes secretly wish someone would come and take care of you?
Sadly the prince on the horse (or in the Ferrari) is as far from reality as one can get and really only belongs in fairy tales where pumpkins turn into carriages and mice into footmen. As many women have discovered, men are not actually better at managing money than women and in retirement find that their husbands did not make enough provision. Many divorced women, for example, are left with much less than half of the assets yet carry the primary responsibility of childcare while rebuilding a career.
The question I asked the women was “how do you know he is rich?” If he drives a fancy car and lives in a fancy house and drinks fancy whiskey, he may have very fancy debt and what you are marrying is a financial disaster. What many women (or men) may not realize is that if they marry in community of property, their partner’s debts become their debts. So if her partner is living the high life without the income to match, his creditors can go after her and her handsome prince suddenly turns into the ugly poison frog.
While a woman can be as financially self-sufficient as a man this does change when she becomes a mother. She may want to take time off work and will often pass over promotions in order to spend time with her children. When you decide to start a family, discuss the financial implications and make sure those are fairly distributed between you and your spouse. However this does not mean you hand over financial responsibility, it is even more important than ever that you understand where your money is invested and that you have a proper financial plan in place.
Because of motherhood women need to take their finances far more seriously than men and save more. In fact women should be fully in control of the household finances and investments because it affects them most. And if you believe you cannot understand investments as well as a man, research conducted by the CFA Institute in the US found that, on average, investment clubs run by women were more successful than those run by men. This was attributed to the fact that women take more time to make decisions, they ask for help and they keep their investments for longer.
So to all our male readers, maybe you should hand the finances over to your partner, she may be the better financial plan!