ONE of the most difficult conversations a couple can have is not about love or commitment. It is about money — how it is saved and invested and what it means for their lifestyle.
Susan Hirshman is president of SHE, a consulting firm focused on financial literacy for women and the author of "Does This Make My Assets Look Fat?"
Paul Sullivan writes about strategies that the wealthy use to manage their money and their overall well-being.
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According to a survey to be released this weekend by PNC Wealth Management, men and women are not any closer in their views about their investments than they were before the recession wreaked havoc on their portfolios.
There is a 10 percentage point difference in how men and women responded when asked whether they were planning their portfolios more carefully, with women being more cautious. And asked how they viewed their portfolio strategy, 51 percent of men said “nothing has changed,” while only 38 percent of women felt the same way. The gap pervaded all the responses.
One upside in the PNC survey, a followup to one it conducted five years ago, was that the recession did not push the sexes further apart in their views about money.
“There was not as much change with the way people think about their money through the recession as we thought,” said R. Bruce Bickel, senior vice president at PNC Wealth Management. “I think that is because there is better communication and they are getting more of their family involved in their finances. It is just a small percentage increase but it was positive.”
Mr. Bickel attributed the continued differences to traditional gender roles in relationships. But he said women had changed their views on risk, becoming more comfortable with it since the previous survey in 2006.
“Women are taking more responsibility and getting involved in the family financial matters, which is healthy,” he said. “Communication is imperative.”
So, should people have a money talk? The consensus among those who write and counsel about gender and money is that couples need to discuss their finances, even if they do not want to or fear it is going to be painful.
“Very often they’re afraid to take that first step,” said Karen Caplan Altfest, principal adviser and executive vice president for client relations at Altfest Personal Wealth Management. “You’d be surprised by how many people don’t know how much their spouse is making.”
Knowing something so basic is a first step, but it gets more complicated from there. Here’s a look at problems that discussions about money can cause and some suggestions on making the conversation productive.
WHO’S IN CHARGE? The divide over investing money and managing risk is pervasive, but the bigger problem is who is actually in charge of the process.
The PNC survey found that 73 percent of women thought they shared responsibility for financial decisions equally, while only 45 percent of men said that task was divided. (About 53 percent of men said they were the sole deciders, while only 17 percent of women said that.)
The disconnect, in fact, has gotten worse since 2006, when 68 percent of women thought decisions were made equally and 48 percent of men agreed.
In fact, the only real area of consensus was on the financial prospects of their children: 57 percent of mothers and 55 percent of fathers said the recession had changed how their children would manage their money.
“What I saw during the 2008 crisis was if I could show women that they were hurt but that they were still going to be able to maintain a lifestyle of their choice, they were O.K.,” said Susan Hirshman, president of SHE, a consulting firm focused on financial literacy for women and the author of “Does This Make My Assets Look Fat?” (St. Martin’s Press, 2010). “What I found, generally speaking, was with men, even if they were going to be O.K., they couldn’t deal with the fact that the number was less. That still applies very much today.”
AVOIDING THE ‘IF ONLY’ CLUB Bridging that gap is the point of the talk. But, of course, it is easier to give relationship advice than to apply it.
One relatively painless way to enter the conversation is not to make it overtly about money. Pick a goal instead.
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