Why is it that, in the year 2021, a mere 20 percent of couples participate in financial decisions equally? This stat comes courtesy of a recent study from UBS titled Own Your Worth, which explores the relationship between women, men, and money.
The report presents a variety of interesting, if somewhat startling, statistics. For instance, half of married women still defer long-term financial decisions to their spouse or partner. Many women say they let their spouse take care of all the long-term financial decisions primarily because they feel "he knows more." Or they simply do what their mothers did-and let men take the lead. Meanwhile, two-thirds of women who defer say they just want to be taken care of, according to the UBS report, which involved surveying 1,500 men and women in marriages and partnerships.
This is not ideal, because as that same UBS report goes on to point out when women don't participate in financial decisions, they forfeit having a voice in decisions that will profoundly impact their family.
None of this is aimed at heaping criticism on women. Rather, it's an attempt to highlight the fact that couples, including those with children who are in the midst of raising families, still have a very, very, long way to go when it comes to talking openly or regularly about money.
Want to get the conversation started? Or at least understand the root causes of this challenge and begin working on pivoting in the right direction? Here are insights and tips from two of UBS's top voices on why it continues to be so difficult for couples to have regular, open money discussions-and ways to overcome such challenges.
Falling into traditional gender roles
It's difficult to attribute the lack of communication about money among partners or spouses with children to a single defining issue. There are many factors, as well as longstanding cultural traditions, that contribute to a reality in which men continue to go it alone when it comes to managing money for a family or when in a relationship. However, one of the most notable reasons for this reality is the continuation of learned gender norms.
"Some of it is this concept of falling into traditional gender roles, which is surprising in 2021," Carey Shuffman, head of the women's strategic client segment for UBS Global Wealth Management, tells Parents. "So many men feel it's part of their responsibility to take care of their wives and families. And women will often say 'Truth be told, I do just want to be taken care of.'"
Time constraints are another factor contributing to the lack of regular, open communication about money matters among partners, spouses, and especially those busy raising a family.
"We're all juggling so much that many couples take a divide-and-conquer approach," continues Shuffman. "If they fall into the roles their parents fell into, [a man] may take on various responsibilities, and one of those is finances. And [a woman] may take on household management and childcare. The more things evolve, the more they stay the same. That's just how things are."
It seems Shuffman is definitely onto something with her insights. UBS's Camille Valentine, a financial advisor based in Boston, Massachusetts, says that's pretty much what she often sees in practice, when engaging with clients.
"I'm working with husbands and wives and families, and I can confirm a lot of that, including when it comes to parents," Valentine tells Parents. "I don't think it's unreasonable if you grew up in a household where you had a father who was the businessman and a mom who was a homemaker to emulate those roles."
We all avoid difficult conversations
Getting back to the surprising statistics in that UBS report, only about 20 percent of couples make long-term financial decisions together. Again, is this where we want to be in 2021?
The thing is, it's human nature to avoid dicey or difficult discussions, says Shuffman. And certainly, money and financial planning would be considered by many to be a "difficult discussion."
"People avoid having tough conversations," continues Shuffman. "Many people don't want to rock the boat, or cause more stress about money. Many husbands and wives or women and men, or any couple regardless of orientation, simply don't know how to broach the topic."
Furthermore, many women in particular believe indifference toward money management liberates them to focus on other things. In reality, the indifference often traps them, says the UBS report. At the risk of getting slightly off-topic here, when women in relationships don't engage in money conversations it can be truly bad news down the line. Why? Not only because those money decisions have significant ramifications for the family as a whole, but also because many wives outlive their husbands. Eight in 10 women will end up solely responsible for their money and the wealth they're likely to inherit, says UBS.
"The women who are woefully unprepared are the women who previously deferred financial decisions to men," notes the report.
Begin money conversations early
Now that we're a bit clearer on some of the causes behind the lack of communication between partners, let's look at how to begin bringing about change-or for younger couples, how to start off on the right foot. UBS's Valentine says the best approach is to begin having money conversations right off the bat.
"The earlier you start talking about money, the better," she says. "If one person in the relationship is responsible for managing money and bills, that's fine. But you can't just turn it over to them and 20 years later say 'How are we doing?'"
At a minimum, both partners or spouses should know who all the key advisors are, such as the family lawyer, financial planner, or CPA. "Make a list of the advisors and have their numbers," says Valentine.
While you're at it, make a list of all of the family's financial accounts-IRAs, joint savings, checking, 401k, and so on. Know where the accounts are held and how to access them.
Schedule regular money "dates"
What exactly is a "money date," you ask? It is a specific, recurring time when you and your spouse or partner sit down as a couple to talk about money and your financial situation.
"The reality is that half of this challenge is time constraints and life moving so quickly," says Shuffman. "If you don't set up a specific time to have these types of talks, it's easy to go a month, or two months, or even years without talking about it."
Let's just be clear, your recurring money "date" may not be the most romantic experience in the world. But here's what it might look like.
"Plan it for a Friday night once a month, at 6 p.m., where you sit down together, destress from the week and talk about things like 'Where are we overspending?' or 'Are we saving more money than we thought we would?' or perhaps look at whether there are any major expenses coming up that you haven't talked about as a couple," explains Shuffman.
"It's important to realize that money and financial considerations are so closely tied to your financial well-being and to your overall well-being as a family," she adds.
Valentine offers one caveat to this advice: Recurring money dates do not need to cover the bigger picture and the more significant life planning money goals such as retirement and estate planning.
"Those types of conversations can happen less frequently, perhaps at the first of each year," says Valentine. "Have these talks on an annual basis and discuss things like, 'What are we going to do this year in terms of retirement?' These kinds of conversations are different than money dates. They are a larger step back and look at 'Where are we going?' Versus in the heat of the moment, when dinner is boiling over and the baby is crying in the background."
More sharing equals more satisfying relationships
There's a great deal to be gained by following the advice shared by Shuffman and Valentine. In fact, the UBS study found that the majority of men and women polled seem to believe that sharing in financial conversations and decisions would increase their confidence and reduce overall stress.
Furthermore, Shuffman says UBS's findings revealed that couples who share responsibilities equally feel more satisfied in their overall financial situation.
"So, the data is there about why it's so beneficial to have both partners be engaged. It's just a question of how to make that happen," says Shuffman. "How do we move from intention to action and bring more women to the financial table and into discussions about the family's financial future?"
Modeling behavior as parents
Before we depart this topic altogether, there's one last important point to be made, which is particularly relevant for parents: Most of us are simply modeling the behavior we observed as children. So, the question to ask yourself then is: What type of example do you want to set for your own children?
"I think we need to be deliberate in terms of the modeling we're doing for our children when it comes to financial discussions and responsibilities," says Valentine, who after her father died suddenly, witnessed her mother become very adept and ultimately quite successful at managing the family purse strings. In fact, Valentine's mother made it a point from then on to teach all of her kids about the importance of saving, investing, and even purchasing life insurance. As a result, Valentine herself took a strong interest in financial matters.
"You don't need to wait for a crisis to teach good behavior," says Valentine. "You want to actively hand this behavior down to the next generation. My mom taught me how to make Christmas cookies and fudge. But she also taught me how to put money into an IRA at 21 years old."