Investor Psychology

Getting Women to Talk About Money

Women are less likely than men to discuss finances with their friends, so they start off at a big disadvantage.

In her biography of Joan Rivers, Last Girl Before Freeway, author Leslie Bennetts describes how stunned Rivers was to discover that her business manager husband, Edgar Rosenberg, had left her millions of dollars in debt when he died. Here was a woman who had built a wildly successful public career, but in her private financial life she apparently inhabited the same "cone of silence" as so many other women. "Women will talk to each other about anything -- including their sex lives and marital problems -- but there's a taboo about money," says Debra Mesch, director of the Women's Philanthropy Institute at Indiana University.

Researchers attribute this reticence to a combination of factors. Men have traditionally been the family breadwinners, and women didn't gain control over their own property until relatively recently. Even when women are the main earners, they tend to minimize their role, says Mesch. And women are trained to think that talking about money is just plain tacky.

But, says Annamaria Lusardi, director of the Global Financial Literacy Excellence Center at George Washington University, family and friends are your primary source of financial information. Avoiding the discussion of money puts women at a big disadvantage that's difficult to overcome. Women consistently score lower on measures of financial literacy, which in turn makes them less confident about discussing the subject or even asking questions. "In our surveys, we find that men tend to feel confident about their financial situation whether they're doing well or not," says Jeanne Thompson, a senior vice president at Fidelity Investments. "But even if women are in a good situation, they don't feel good about it."

Learning to speak up. Joan Rivers' case was an extreme one. But financial advisers often have similar experiences when they're working with couples. "Women frequently are not engaged in the conversation," says Dawn Doebler, cofounder of Her Wealth, an initiative of Bridgewater Wealth and Financial Management in Bethesda, Md. "Even in the best of marriages, talking about money can rapidly deteriorate into a strained conversation, and spouses never get through to the end."

Advisers use a variety of techniques to put women at ease. In high-stress situations, such as retirement planning or divorce, "we remind clients that we’ve been through this hundreds of times with women in the same situation, and there are common themes and common questions," says Doebler. Women themselves are much more likely than men to say that it's important for an adviser to educate them about such things as investment management and retirement risks.

Even in Lusardi's classes, top female students are less likely to participate. To get female students to speak up, Lusardi teaches "personalized" finance classes emphasizing goals that appeal to women. "I used to think one way to motivate students was to teach them that a knowledge of finance can help them become richer," says Lusardi. "But for women, becoming rich was not necessarily the ultimate objective. They're more interested in being financially secure and free of money worries so they can achieve the things they want to do." She also avoids financial jargon and technical terms, which are off-putting. "It's important to start with plain English and build the language of finance."

Based on my own experience speaking to women about money issues, I have found that the best way to breach the cone of silence is simply to speak their language and address their concerns -- and it never hurts to add personal experiences and a dash of humor. Find that comfort zone and a torrent of words -- and questions -- comes pouring out.

Most Popular

Refunds for $10,200 Unemployment Tax Break to Begin This Month
Coronavirus and Your Money

Refunds for $10,200 Unemployment Tax Break to Begin This Month

The IRS will start issuing automatic refunds sometime in May to people eligible for the unemployment benefit tax exemption.
May 1, 2021
The Benefits of Working Longer
Empty Nesters

The Benefits of Working Longer

Delaying retirement for a couple of years—or even a few months—is the most effective way to improve your retirement security.
April 29, 2021
10 Dividend Growth Stocks You Can Count On
dividend stocks

10 Dividend Growth Stocks You Can Count On

What should investors prioritize in dividend growth stocks? A history of aggressive payout expansion, and the ability to generate enough cash to keep …
May 3, 2021

Recommended

Estate-Planning Your Stuff with T. Eric Reich
Empty Nesters

Estate-Planning Your Stuff with T. Eric Reich

What to do with the house, the vacation house and the china? We talk with a financial adviser who's got some wise counsel. Also, who makes up the so-c…
May 2, 2021
What You Need to Know about College 529 Savings Plans
529 Plans

What You Need to Know about College 529 Savings Plans

Do you know how much you’re able to contribute or what the funds could be used to pay for? How about how contributing affects your taxes? Check out th…
April 14, 2021
37 Ways to Earn Extra Cash in 2021
business

37 Ways to Earn Extra Cash in 2021

We flag a wide variety of cool side hustles to earn bonus bucks to cover expenses expected and unexpected as we begin to emerge from the pandemic lock…
April 8, 2021
6 Money-Smart Ways to Spend Your Third Stimulus Check
Coronavirus and Your Money

6 Money-Smart Ways to Spend Your Third Stimulus Check

If you don't have to use your third stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
March 20, 2021