Wednesday, April 27, 2016

Women's Rights and Obligations Concerning Financial Matters ... It's 'Sharing' Time

Should Moms Manage the Money? will provide many people with good reason to rethink how their individual family finances have been, are and will be handled and shared.

And this is especially true with respect to the appropriate sharing role of the sexes, especially considering that women are better investors and that they also live longer than men. Sorry, guys, it's a fact.

"In many households, men tend to manage family investments and taxes, and women, if they get involved in money issues, tend to focus only on everyday expenses and charitable donations....

A 2014 UBS Wealth Management Americas report noted that when it comes to investing, it’s men making the decisions alone half the time. Another 37 percent of couples shared the decisions, while just 13 percent of women made them alone. Among younger women, just 15 percent of millennials and 18 percent of Generation Xers were flying solo. . . .

One reason men may handle investing more often is that they tend to come into a marriage with more assets. A 2014 Wells Fargo study of millennials reported that the males had both a higher median household income ($83,000 vs. $63,000 for women) and higher median assets that were available for investing ($59,000 vs. $31,000).

Or perhaps men simply like handling this task more. Does it really make sense to take it away from them?...

First, women tend to be better investors. Studies have shown that men have a bit too much confidence and take a bit too much risk. One seminal piece of research in this area showed how badly men’s investment returns suffered because they traded their stocks too often. A 2015 book called “Women of the Street: Why Female Money Managers Generate Superior Returns (and How You Can Too)” sums up the case for those who want to know more — or slip a treatise under their husband’s pillow.

Second, when mothers are the money leaders in the household, children take notice. For years, surveys of families have found that parents talk to girls less often about money than they talk to boys and that teenage boys end up believing they will earn more. . . . Moms who manage the money serve as role models who can counteract some of these problems.

Finally, many women will have to be in charge of the money sooner or later, so having some experience as the primary household money manager is essential. Women outlive men, and there are about four times as many widows as widowers in the United States . . . . All of us who toil in the personal finance salt mines hear stories of widows who had to start reassembling their financial lives from scratch when their husbands died suddenly. When you are sad and older, you do not want to find yourself locked out of the household accounts, literally.

Divorce happens, too, so it’s good for both spouses to know where the money is (and if it’s been moved around recently) in the event of a surprise separation. . . .

A couple’s financial discussions should be collaborative, whether the person executing the decisions is male or female. So you sit down at least once a year and remind yourselves of the answers to the following questions: Where is our money now? How do we get to it? Has our willingness to take risks with our investments changed? What are the most important goals for the next year? And what do we want to change?"

Summing Up

The ways things are and always have been is not a good reason not to change how things will be done in the future.

The plain fact is that women live longer than men.

And another plain fact is that many single parent households exist today.

Women should become familiar with and actively participate, if not comletely manage, the financial affairs of their families.

And men should welcome the change.

That's my take.

Thanks. Bob.

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