3/14/2023 0 Comments Smart money proWith the exception of women who work, say, on Wall Street or in accounting, even some of the most capable among us can become champion self-doubters when we have to talk about our money. “It’s like I have a force field that won’t let it in.” She’s not alone. “Money information just bounces off my brain,” she says. Take Amy, a 42-year-old senior manager based in New York City. But when it comes to this one particular subject, not so much. Odd, isn’t it? So many women radiate competence and authority on a daily basis (brilliant doctors, strong managers, cool and collected stay-at-home mothers). Read on to learn more about these barriers and how to overcome them.įinancial Barrier No. The female financial paradox has continued unabated.Įxperts have identified four key factors underlying the paradox: Women tend to be insecure about the subject of money we focus on scrimping instead of investing we rely too heavily on others for financial know-how and we’re not always adept at translating abstract figures into concrete goals. One would hope that women’s savings would be inching toward parity now that the gender pay gap is becoming a relic. However, men contribute far more to those plans: Their median account balance is $31,388, compared with women’s $20,877, according to Vanguard, an investment company. According to the Employee Benefit Research Institute, a nonprofit based in Washington, D.C., roughly the same number of full-time employed men and women participate in retirement plans. No wonder a recent survey conducted found that 60 percent of women thought their investing and planning skills were below average. She says that, traditionally, women have had a “head-in-the-sand approach” to long-term financial planning. Eileen O’Connor, the vice president of wealth management for McLean Asset Management Corporation, in McLean, Virginia, agrees. “Because we’re fighting against centuries of societal norms in which women were excluded from discussions about finances, many simply aren’t interested in these topics,” says Amanda Steinberg, the CEO and founder of the women’s personal-finance community. And yet we lag behind men in actions crucial to building wealth and security, such as investing and having a long-term money plan. One survey found that a full 90 percent of women identify themselves as the chief bill-payer and shopper for the household. Nor are we shrinking violets regarding everyday financial affairs. We’re graduating with more college degrees than men, and we’re climbing farther up the ranks in nearly every industry. We have more power and earning potential than ever before. What the heck is going on here? We women are hardly meek and passive in our careers. I was part of a phenomenon that some money experts have dubbed “the female financial paradox.” Translation: Like millions of other women, I was perfectly happy to pinch pennies and hunt down sales, yet I couldn’t muster the slightest interest in big-picture financial planning. Signing up for a 401(k) was a bizarre psychological hurdle I couldn’t get over. I dithered and kept putting off enrolling before finally keeping my word-one decade later. What does 401 even stand for? And, for that matter, (k)? To get my colleague off my back, I halfheartedly promised to look at the paperwork. The more he went on about the magic of compound interest, the more he sounded like the teacher on the cartoon Peanuts. When I stared at him blankly, he bellowed in frustration, “It’s free money!” Then he tried impressing me with numbers: By investing less than $100 per paycheck, I could eventually accumulate a nest egg of a million dollars or more. Speaking slowly, my well-meaning colleague explained that if I participated in the plan, the company would match my contributions. Until I spoke to Joe, an older coworker, who discovered that I had not signed up for the 401(k) retirement plan offered by our company. So at age 21, working at my first job, I thought I had my act together when it came to my finances. Ready to take charge of your financial future? Start right here. The bad news: We still tend to pass the buck on important money matters, such as investing and retirement. Follow good news: More than a third of American women are now the family breadwinner (look at that!).
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