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What Does Gender Have to Do with Financial Planning? Plenty!

Do women need specialized advice when it comes to money? Are we somehow so different from men in our approach to finance that we need books specially geared to us?

When I first considered these questions, my instinct was to answer no. I figured I would write an essay explaining why women are just as confident and savvy when it comes to money as men. But after delving into the topic a bit, I changed my mind. Generally speaking, I do think we bring unique emotional issues to financial situations, and I do think it would help us get richer if we could work through those issues.

I began my search for answers with a trip to the library. I checked out Suze Orman’s Women and Money: Owning the Power to Control Your Destiny, Jean Chatzky’s Make Money Not Excuses: Wake Up, Take Charge and Overcome Your Financial Fears Forever; Janet Bodnar’s Think Single: The Woman’s Guide to Financial Security at Every Stage of Life, and Lois P. Frankel’s Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make with Money.

For starters, the fact that all these books exist and that at least a couple are best-sellers seems to support my argument. There is obviously a market for women-only books about finance.

Before I could delve into my reading material, I attended an event for women in business. The headline speaker: Jean Chatzky. I recognized her from television and from the cover of her book, in which she is wearing a black sheath and carrying a clear purse stuffed with money.

Chatzky began her speech by explaining how to get richer. There are four things one must do:

  • Make a decent living
  • Spend less than you make
  • Invest the money you don’t spend so that it can work as hard for you as you’re working for yourself
  • Protect yourself and the financial world you’ve built so that a disaster—big or small—doesn’t take it all away from you

“Everything else is just window-dressing,” Chatzky told us from her podium.

I was sitting in the audience thinking she may have dumbed this down a bit too much. Anyone with an ounce of common sense could come up with those four things—and the women around me were accomplished and sophisticated.

However, as Chatzky continued, her speech got more interesting.

“If the key to the treasure is so straightforward, why aren’t we all richer?” she asked. “For women in particular, the answer is more complicated than the question.”

Chatzky went on to tick off a laundry list of excuses women have given her for not taking charge of their financial lives. We were supposed to raise our hands every time she read an excuse we had used.

It was easy for me to keep my hand down at times. There was one about shopping after a bad day. I don’t do that. I have never been an over-spender.

Here is the one that got me: “My husband handles the money.”

I didn’t raise my hand because I was embarrassed. But I should have because I have completely handed over responsibility for money matters, big and small, to my husband. When we moved last year, he decided how much we could afford to spend on our next house. I asked him, “Are you sure?” because I had no information with which to make this decision myself. I honestly don’t even know what our car payments or mortgage payment are.

Chatzky told her own story, which was a lot like mine. She had been working as a financial journalist, writing about money all day long, and then going home to a marriage in which she had willingly ceded control of financial matters. She slowly took control—a process she describes in her book.

Why do women hand over money matters to their husbands? Chatzky said it is often because we women want to be taken care of. Our “inner-princess” comes out. As much as I hate to admit it, Chatzky was describing me. I vowed to put my knowledge about money to work in my own household.

Later, I asked a friend, who is single and in her mid-30s, if she thinks women have a different attitude about money. Without hesitation, she answered yes. Her theory is that women eagerly give control to their husbands because that is the role that their mothers had. If she gets married, she will hold onto the financial keys, she says, but admits that might not have been true had she married younger. She had no choice but to figure out how to manage her own money, buy a house, lease a car, etc.

One thing about money that she still struggles with, however, is advocating for herself. For whatever reasons, women do have a harder time negotiating for big pay packages and raises. This means that we are making less money, which puts us behind the starting line when it comes to getting wealthy.

When I finally got around to reading the books, I found common themes, though each author takes a somewhat different style. Orman encourages women to take care of themselves financially, instead of always putting others first.

“It doesn’t matter if I am in a room full of business executives or stay-at-home moms, I find the core problem to be universal: when it comes to making decisions with money, you refuse to own your power, to act in your best interest,” Orman writes.

Frankel offers a list of reasons that “nice girls” don’t get rich, including:

  • Money is power and most little girls are not taught to be powerful—they’re taught to be nice
  • Women are more likely to spend their income on their children and the household, whereas men are more likely to be prudent about investing
  • Women are reluctant to ask for wages, perks, or raises reflective of the value they add to their organizations because they’re not sure they deserve it

Not everyone agrees with these books—and me—that women tend to have unique emotional baggage when it comes to money. While I was reading, a friend e-mailed me a well-written piece in Time magazine bashing these books.

“All these books claim to help empower women, but they wind up doing exactly the opposite,” Time writer Anita Hamilton argues. “Most egregiously, they exaggerate women’s financial foibles at a time when we are making more money than ever before ... These financial frenemies go on to suggest that our misguided habits are the root of this overblown ‘problem,’ discounting the economic forces that deflate women’s earnings in the first place—things like unpaid family leave and wage stagnation for women-dominated occupations like home health aides and teachers.

While I admire Hamilton’s writing and believe she makes good points, I ultimately decided that while I wish she were right, I am not sure she is right—at least not completely. Sure, factors like unpaid family leave and wage-stagnation for women-dominated fields make it tougher for women to get ahead financially. Also, women spend more time out of the workforce than men do. Women are busy raising children and caring for aging parents, important, but hardly lucrative roles.

However, I also think a lot of us are intimidated by investing and more comfortable passing the financial buck to the men in our lives. Many of us also have a hard time advocating for ourselves, whether it is asking for a raise at work or insisting on a personal retirement account while we are staying home with the kids. In other words, I think Chatzky, Orman, and crew make good points.

Now, if you’ll excuse me, I need to go work on my family budget …