Your ________ Won't Have To Live Off Your Investments

The latest from M.P. Dunleavy at the NYT:

The No. 1 financial complaint I hear from women, delivered in tones that range from exhausted to ashamed to defiant, is this: “I hate dealing with money, so my __ (fill in the blank) takes care of everything.”

That role is often filled by a spouse or partner, although fathers and accountants are also candidates when a woman hands over the reins to her money.

Is this division of labor so wrong?

...

Many couples try to strike a balance when dividing household chores, financial and otherwise. But when women pass the buck, it leaves them far too vulnerable.

...

In a study, “Gender Differences in Investment Behavior,” Professor Hira and her co-author Cäzilia Loibl, assistant professor of consumer sciences at Ohio State University, studied more than 900 randomly selected households with incomes of $75,000 or higher. The study forms a chapter in “The Handbook of Consumer Finance Research” (2007, Springer).

The authors found that while “men were more engaged in their personal finances, generally speaking, women tend to do more of the day-to-day tasks,” Professor Hira said. They tended to abdicate their financial roles when it came to planning for the future, saving and investing. “The majority of women found investing to be stressful, difficult and time-consuming,” she said.

Let me lay out what is wrong with this picture: Your investments? They are your investments. They are what you will rely on to keep a roof over your head and the dialysis machines humming along when you're older. Your dad, your accountant, or your partner, no matter how much they might have your best interests at heart, will not have to rely on your investments the same way you will. And I guarantee you that they will not have the same risk tolerance you do--no two people do. When it comes to your investments, no one can do as good a job as you can. That means you, ladies.

But my partner and I are going to grow old together? you say. Good point. You two do need to plan together. But the key word there is "together." Don't be like my family member, who used his wife's spousal IRA as play money for his investments (it didn't really count, you see, since it was "his money" anyway). He loaded it up with precious metals, which tanked, and then liquidated the account before its value rebounded and later soared. Don't be like my other family member, who took several months to figure out where the money was after her husband died--she never looked at the accounts and had no idea where his savings, investment, and pension information was. Don't be like my other other family member, who steadfastly insists that investing is too complicated and too boring for her, and rebuffs her husband's every attempt to involve her and ask her opinions in managing their accounts. Everybody knows couples like this, even if you think you don't. If you're partnered, be a partner.

And if you're not partnered, hey, think of it this way: you don't have to compromise with anyone.

The article suggests that the way to address this trend of women abdicating their long-term financial planning to the nearest available man is to overhaul the way that financial planning can be done, making it more collaborative, social, and interactive. In other words, more "feminine." It is unclear whether tea parties and sleepovers would be involved.

If tea parties and sleepovers would help some women take a more hands on approach to savings and investments, I'm all for it. But why not focus some of the attention on the root of the problem rather than on the branches?

PROFESSOR HIRA believes a lack of confidence causes some women not to take a more commanding role. Traditionally men are expected to be competent financially, whether it’s their bent or not. “For women,” she said, “the expectation is often that somebody wonderful will be there to do it.”

That seems like an expectation that's worth retooling.

This post was featured in the Carnival of Personal Finance #145.