This post is part of the #WomenRockMoney Movement, a large group of female personal finance bloggers who have come together to inspire more women to learn about money. If you have money questions, or want support for your financial goals, learn more about how you can join us at the movement homepage. I hope to see you there!
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Last weekend I was visiting my mom when she told me my sister got into a car accident a few weeks earlier. Don’t worry, she’s fine.
What was interesting was that my sister called my mom first instead of her husband, Mark*. Probably because she didn’t want to get yelled at.
*Not his real name
“How much is your car insurance deductible?” my mom asked.
“I don’t know. Mark deals with all that stuff,” my sister replied. Ever since they’ve been together, my sister has deferred everything money-related to my brother-in-law, because she’s not a “numbers” person.
Well, mom started to get turnt up: “Everything is Mark this and Mark that. What about using your own brain? You need to know how to do everything yourself.”
And then she dropped the bomb:
“WHAT IF HE FINDS A NEW WIFE???”
So much for not getting yelled at. To my mom, the breadwinner in our family, the idea of leaving everything up to a man is crazy talk.
After I was done keeling over from laughing, it got me thinking about women and finances. Specifically:
My mom is an accidental feminist. And amazing. Just because she’s not educated doesn’t mean she doesn’t know how to stand on her own and plan for the future. These days my mom spends most of her free time sitting on the couch watching Asian soap operas, but she never misses an opportunity to school me on her plans. Like when I passed through the living room in search of chocolate, and she used those 5 seconds to remind me exactly where she keeps her paperwork and bank accounts in case anything happens.
My mom has also always encouraged us to be self-sufficient. I mean, when she was feeding my few-months-old nephew, she cooed to him, in full-on baby talk, “Baby must learn how to hold bottle by himself.”
While these ideas might have bounced off my sister, they affected me deeply growing up. From a very early age, I realized if I wanted something I’d need to find a way to get it myself. There was never a question as to who would manage my money, because I never felt like I had a choice. Looking around at the role models in my life, there wasn’t anyone who could teach me about finances. Being a female version of Urkel helped, too. As a teenager, I thought I might not ever get married.
It was either seek out information or put my head in the sand.
So I learned how to save and invest money through reading books and countless blog posts (thank you, Internet). I’ve been doing money alone for so long, I can’t imagine people buying me stuff when I can just use my own money. But I also know my experiences are rare.
Are You in the Dark?
What is more common is my sister’s scenario, that women continually shy away from finances. Even though money affects every aspect of our lives. The consensus seems to be that women are scared of turning into old bag ladies, but we’re also afraid to take the reins.
I really liked this Real Simple article, because the first paragraph paints a very familiar picture for many women: a disinterest in finances can result in not contributing to a 401k for 10 years. Women pride themselves on being frugal, but when it comes to building wealth we’re woefully lagging behind.
One of the reasons why I started this blog was because I think most people, whatever gender, should feel empowered to take charge of their money. Truly! Even if you always thought you were bad at money. Money, and your future, are too important to outsource to someone else without a second thought.
Here are a couple of realities I keep in mind that inspire me to not only stay on top of my money, but to forge my own financial identity.
“Experts” Might Not Know What They’re Doing
I often see people handing over their financial planning to family members–usually a husband, dad or brother.
It makes sense. Your parents have always banked at a certain place, and so do you. They also managed your life when you were younger, so what’s the big deal if they manage your investments for you, even though you’re now an adult? Your husband “seems better with numbers,” so you let him dictate all the financial decisions. When we have so many financial options, it’s easier to fall back on the status quo.
But how do you know if they’re good at managing money? Most of the time, you don’t. Especially if you’re in the dark about finances yourself. Things that are seemingly harmless, like fees, can make a difference in how much you end up with in retirement.
While I take the lead in our finances, my husband and I are both involved in financial decisions and have a transparent system in place where we both can see what’s happening with our money at all times.
The other day I wanted to buy a stock, and I could have just done it without running it by my husband. But I said, “Hey, I’m thinking of buying this stock for X amount of money. What do you think?” He was nervous about the amount for a high-risk buy, so I agreed to buy only half the shares. Even if we make an inevitable bad decision, at least we both have a framework for making those decisions. And no secret dealings. Transparency for all is never a bad thing.
Marriages Aren’t Guaranteed to Last
Mom is right to question: What IF your marriage ends?
I know some of you are thinking I’m a total Debbie Downer. Downright unromantic. I see it differently. Thinking about the possibility of your marriage ending is NOT expecting it to fail. It’s being realistic and smart. Actually, I think refusing to consider that your marriage might end is way more dangerous.
I remember a story from college that stuck with me. My English teacher was telling us how her husband left her when she was in her 50s. She had no job or savings on her own, and had to go back to school to learn new skills. This kind of story is way too common, and it seems like every other day I’m clicking on an online article that’s a variation of the same theme.
When my husband and I got married, it was important to me to keep some separate bank accounts in my own name with money I’ve saved myself. If we get divorced, that money should stay with me. And before getting married, it’s worth checking whether or not you’re in a community law property state, where your marital assets would be initially split 50/50 in a divorce. For those who live outside of those states, think twice about not having any assets in your name alone, and whether or not you’re OK with that risk.
A Life I Can Afford–By Myself
Yesterday I was browsing Street Easy, a New York City real estate website, just for fun. More like “just for torture.” I found two rentals in our neighborhood that fell into the sexy category–walk-in closets, new finishings, outdoor spaces. Perfectly luxurious. And also a not-insignificant $1,500 increase from our current monthly rent.
I crunched the numbers. We could swing it.
But only on BOTH our incomes.
Apartment upgrade application denied. Because here’s the thing:
I can (just barely) afford our current apartment on my salary alone. Living below our means allows us to spend half of our take-home pay and bank the rest. While part of that is because we’re privileged to make good incomes, it’s also a strategic choice.
I don’t want to get used to a lifestyle that I can only afford with my husband’s money. If something happened, I’d be able to move into a similar apartment by myself without a major financial setback. Nobody ever thinks having to downgrade their lifestyle is a fun time. So I work hard to keep lifestyle inflation in check, even though our combined income can support more spending.
It’s All About the Baby Steps
Financial confidence comes with knowledge. And learning to manage your finances is just a series of baby steps. So start by trying just one new thing. Find the login to your accounts. Start poking around at your bills. Better yet, start tracking your spending. Go to the library and browse personal finance books. Ask the questions you’ve been scared to ask. Pick one thing from this list, and do it. Most importantly, get involved. Don’t stand down when someone tries to tell you that money isn’t “your place.” You can’t afford not to. You are exactly where you need to be. My mom would be proud of you.
Are you Team DIY when it comes to finances? What was it like in your family growing up? Did one parent handle the finances while the other was in the dark? How did it turn out?
PS. Visit the #WomenWhoRockMoney page to read more posts by amazing women!
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