It may be the 21st century, but according to exclusive MoneyRates.com poll data, husbands are still more likely than wives to take the lead in family financial decisions. There are several reasons why this may be a bad idea.
The survey polled 1,000 married people, split roughly equally between men and women. It found that in just over half the households, financial decision-making is a 50/50 process, shared equally between husband and wife. However, where one or the other takes the lead role, the husband assumes control more than two-thirds of the time. This is despite the fact that 84 percent of the women surveyed felt that they were equally or better qualified to handle these decisions.
Reasons for Women to Play a Bigger Role
The lingering disparity in gender roles when it comes to financial decisions could lead to families handling their money less effectively. Here are five reasons why women should step up and assume an equal role in household financial decisions:
- Women generally live longer than men. Women in the United States live longer than men. According to the Social Security Administration, at age 40 a woman is likely to live just over four years longer than a man. So, because a wife is more likely than her husband to have to handle financial decisions alone at some point, it is best that she stays fully up to speed throughout the marriage.
- Social Security decisions require a team approach. Because of spousal survival benefits and the fact that Social Security payments vary depending on the age at which you start taking payments, gaming out the best approach for when a couple should start receiving benefits is best approached as a team strategy, which may involve initiating benefits at different times.
- Some men really are from Mars. As much as traditional gender-based stereotypes have been eroded in recent decades, there are still temperamental differences between many men and women. The same traits that lead some men to insist on taking the lead on financial decisions can also lead to excessively risky or stubborn financial habits.
- Understanding expenses is a key to retirement saving. The survey found that even though men are more likely to take the lead in major financial decisions, women are more likely to handle day-to-day household budgets. Knowing what those routine expenses are is essential to retirement saving, since it allows for a more informed estimate of how much money you will need in retirement than any rule of thumb about replacing a given percentage of income.
- Everyone can use a sounding board sometimes. Fifty-five percent of those surveyed take a team approach to financial decisions, and it's likely that the remaining 45 percent might also find that two heads are better than one. This is especially true because more than a third of the households surveyed assigned the lead responsibility for financial decisions not based on who they felt was more qualified, but simply because one spouse deferred to the other.
You may remember the feminist-themed Virginia Slims advertisements from the 1970s that featured the tagline, "You've come a long way, baby." Well, you've come a long way, Mom, but you may still have a little further to go in assuming an equal role in family financial decisions.