Editor’s note: This article is part of a Next Avenue special section about women age 50+ managing their money. It originally ran in February 2015.
Love is in the air with Valentine’s Day upon us. Not my favorite holiday.
It isn’t that I don’t love my husband (I do!). It’s that, for couples, this “holiday” is so often about impulsive spending. A dozen roses don’t come cheap (often $50 and up). Add a romantic dinner out, perhaps a present… and ka-ching.
My female friends, I think the best gift you can give your valentine is an hour of your time to talk about your finances and money goals — it can even be an IOU if you don’t have time this weekend. Use this date to dream together about how you two might save and invest so you can spend on something meaningful — even if that means a little delayed gratification.
(MORE: Shrewd Money Advice for Women Over 50)
Fidelity's Survey of Women and Money
I suspect you won’t heed my advice. And here’s why: “Women are more comfortable talking about their health than their wealth,” says Kristen Robinson, Senior Vice President of Women and Young Investors at Fidelity Investments.
Robinson’s view is based on findings from Fidelity’s Money FIT Women Study, released today. Eight in 10 women avoid financial conversations because they are “too personal” or “uncomfortable,” according to the online study of 1,542 women with employer-sponsored retirement plans.
Even in the milieu of romantic relationships — where financial assets are often shared— Fidelity found that women are more likely to talk with their significant others about health issues (78 percent) and sex (74 percent) than salary (66 percent) or investment ideas (65 percent).
Women’s anxiety about discussing money occurs even if they’re talking to a financial adviser. Less than half of women Fidelity surveyed (47 percent) say they’d be confident talking about money and investments with a financial professional. And half of women who have a primary investment firm haven’t spoken with a rep there, Fidelity said.
(MORE: Women and Money Management: A Sad Story)
Budgeting, Saving and Investing Confidence
Day-to-day money management? No problem. Fully 82 percent of women said they’re confident handling budgeting matters.
“Women have done a really great job there,” says Robinson. “Where the disconnect is, though, is that less than half — 37 percent — say they are confident planning for retirement and 28 percent say they are confident selecting investments on their own.”
For Robinson, and, for me, that’s troubling. It’s also confusing, since women tend to be better savers and investors then men.
While women typically earn two-thirds of what men do and their retirement balances are smaller on average ($63,700 versus $95,800 for men, in a 2013 Fidelity study), when adjusted for their compensation differences, women actually save more of their income, Fidelity says. They put away 8.3 percent of income vs. 7.9 percent for men.
Women: Better Investors Than Men
And when roboadviser SigFig analyzed portfolios of 750,000 investors, it found the median net returns of women in 2014 beat those of men: 4.7 percent vs. 4.1 percent.
Robinson says women have the characteristics that make them astute planners, ultimately enabling them to have better performance. “They’re not in it to outperform the market,” she says. “They are in it for their long-term goals.”
Well maybe until they hit age 55. The SigFig study also found that women tend to invest less aggressively than men until 55 and then the reverse is true, when women keep a higher percentage of their portfolios in stocks than men do.
I think that’s because, for women, once the fear sets in that they haven’t saved enough for retirement, they realize they need to be more aggressive to ramp up their savings. In Fidelity’s survey, 60 percent of women said they worried they won’t have enough money saved to last through retirement. The bag lady fear is persistent and pervasive.
The Survey's Good News About Women
I don’t want to leave you with a bouquet of black roses, though.
There’s some good news in Fidelity’s survey: Nearly all of the women said they want to learn more about financial planning (92 percent) and get more involved in their finances (83 percent) within the next year. Women have great intentions, Robinson said. “They just don't know how to get started and who to get started with,” she told me.
(MORE: 5 Ways Women Can Be More Confident Investors)
Finally, these Fidelity findings about boomer women made me smile:
- They’re more likely to talk about their investments with their spouse than Gen X or Gen Y women (73 percent vs. 62 percent and 59 percent)
- They feel more confident and less nervous than the younger generations when it comes to investing, long-term saving and retirement. Some 63 percent say they know where to invest, compared to 48 percent for Gen X and 60 percent for Gen Y. And 70 percent are confident about long-term saving and retirement; only 54 percent of Gen X and 62 percent of Gen Y women are.
A Valentine's Gift to Your Daughter
“What made me mad about this survey is I’m really worried about our younger generation and how they are facing their financial futures,” says Robinson. “We need to change that.”
So here’s a thought: If you have a daughter, considering giving her a Valentine’s present of a date with you to talk money. As I wrote in this Next Avenue post, “Mothers: Teach Your Daughters to Save For Retirement,” it’s a great way to be a role model.
You might even get together a group of local moms and daughters to make the conversation less awkward. “We talk about sex with our daughters," Eleanor Blayney, author of Women’s Worth: Finding Your Financial Confidence and founder of Directions for Women, a financial consulting firm based in McLean, Va., told me. “But money is still very hard to talk about.”
It’s true. Even so, buy your daughter some chocolates.