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.

Women Who Mentor Women

This remembrance of women's health advocate extraordinaire Barbara Seaman sparked a lot of thinking for me about women's networking and mentoring. As in, the way that women are mentors, and are mentored, and how it is so important to support other women's professional development along with our own.

Although the article doesn't use this word, it is an amazing testament to the power of mentoring among women. It's not that simple, of course. One doesn't achieve success simply by meeting the right people or being encouraged by them to do something great. But those things are a crucial help to people who do have the drive and the skills and the passion, but who might not have the confidence, or the connections, or the secret handshake needed to get a foot in the door or to work their way up whichever ladder they want to climb.

Oh wait, confidence, connections, and knowledge of the secret handshake? You mean, all the stuff that has been so hard for women to draw upon in the same way men are able to? Yes, that's exactly what I mean. Mentoring can be of immense help to anyone, but it's especially important for people who, for whatever reason--sex, race, economic background, sexual orientation--might be easier for the powers that be to dismiss or overlook. For us folks, it is particularly invaluable to have someone available to show you the ropes, to give advice and answer questions, and to encourage growth and accomplishments that no one else may be expecting from you because of who you are.

When I think about my own favorite mentor, a woman who worked for much of her life as a judge and who I knew first as a member of my parents' church, I can list with certainty the ways in which she has helped me in my schooling and my career. She helped me decide to go to law school, wrote letters of recommendation for me when I was looking for positions after school, talked with me at length about whether I might want someday to go into the judiciary or legal academia and what steps I might want to take to pursue those paths, gave me fantastically helpful comments on a legal article I published after school, and continues to send me articles or book recommendations she thinks might be helpful to my professional development. She has talked with me about her struggles as a woman in the legal profession, how she has dealt with issues ranging from work-life balance (leaving private practice to work as a judge!) to the sexist pronouns some of her colleagues prefer to use in legal opinions and texts (yup, still working on that one).

Being able to talk with someone who has been through not just the same professional training and substantive work experiences that I am going through now, but who had these experiences as a woman is invaluable. She gets it when I say how frustrated I am with marketing events for female lawyers that invariably involve spa treatments or child-centric outings with clients. She knows why I'm groaning that yet another woman has decided to leave the firm not two months after coming back from maternity leave. I have male mentors, too, whose help I am also grateful for, but these types of things don't sting them in the way they sting me. My favorite mentor knows where I'm coming from because she's been through similar things herself.

I would encourage anyone who would like to develop a mentoring relationship to think hard about what sorts of guidance you want in your career. Think big: it's a wish list. But when you're thinking about that list, don't forget about demographics. Do you want someone who can talk to you about how they have dealt with racist comments from supervisors? Or which partners haven't ever in living memory given an assignment to a woman? Or how they came out to their coworkers? As a woman in what has long been a male-dominated field, I can tell you: it helps to be able to talk to someone who is on my side and who gets it--not just academically, not just in theory, not just from a position of sympathy, but from firsthand experience. So maybe you look at your list and you can't think of a single person who fits each of these criteria. That's OK. I have multiple mentors, and they're all fabulous. Right now I'd say I've got mainly two: one male partner who has been working in my practice area for decades, and this female former judge. I wouldn't give up either of them. Together, they provide everything I could hope to put on my wish list.

I did have a strange thought when thinking about this article. I'm getting to a sandwichy part of my career--I can still benefit hugely from having mentors, but I also feel like I'm nearly at a point where I could be useful as a mentor myself. Not to young lawyers, but certainly to students interested in law or public policy. Holy crap, that's weird to realize. I find stories like this one about Barbara Seaman so inspiring, but have trouble thinking about myself serving a similar role in someone else's life. I suppose I'd better get used to it, since if I'm going to talk big about how women need female mentors, I ought to be willing to step up. Where does one even start?

Carnival Love

My first Money In Polite Company post was featured in this week's Carnival of Personal Finance. I am hoping this will be an occasional series where I can spout off about money and etiquette. Send me your questions, y'all.

And I'm late on these two, since both of these were posted a day or two after we left for vacation, but heads up on two Carnivals I participated in at the end of February.

The Dratted Engagement Ring was selected as an Editor's Pick for the Carnival of Twenty-Something Personal Finances, graciously hosted by The Frugal Law Student

Over at the Carnival of Personal Finace #141, hosted by Broke Grad Student, my post Wedding As Status Symbol also got an Editor's Pick nod.

Do You Feel Guilty Spending Money When The Economy Sucks?

Yesterday I found a china cabinet and liquor cabinet that would work great in our dining room. I have been looking for a china cabinet casually for about two years--it is one of those pieces of furniture I knew I would eventually (there is very little cabinet space in the kitchen), but I couldn't find one in the right dimensions that was the right finish and the right price and the right Arts And Crafts Meets Modernism style. And when Shiner moved in a year ago he brought a lot of wine and liquor that is being stored mostly on the floor in a corner of the dining room. So these furniture purchases have been a long time coming, and through juducious use of my tax refund I can afford them without dipping into my "slush fund" or seriously impeding my ability to meet my 2008 goals. The furniture will be about $1800 including shipping and I will need to "find" $1400 to hit my 2008 non-retirement savings goals. That's an amount I can do, though of course it will be more of a stretch.

Then I wake up to NPR reporting that Bear Stearns got bought by JP Morgan Chase and I started thinking, "Oh no! We just went on vacation! The economy is in the toilet! This is no time to go on a spending rampage, buying frivolous things like furniture! My God, woman, you just bought groceries yesterday, do you think you're made of money? The only reason you want a china cabinet is so you have somewhere to put fancy wedding china, but no one can afford to buy you fancy wedding china! We're all going to be eating catfood before the years is out! And my god, what will the cats eat then?"

This is largely foolishness. The vacation money was earmarked savings. The furniture would be bought with cash. Well, technically I have neither "done" my taxes or "received" my refund but I got far enough in TurboTax before it ate my info to know how much I'll be getting, and until that money comes in I can float it from my slush fund. The point is I won't be going into debt either way, and I'm in fine shape apart from this expense. But the frenzied media coverage of the economy made me seriously reconsider myself. My instinctive reaction seemed to be that no matter how I was doing financially, that I should save as much as I can and buy as little as possible--basically, that the national economy should dictate my personal economics. To some extent that's true. These days I would not want to quit my job to raise capital for my new pet rock business. But neither do I want to eat stone soup and start squirreling away for global economic collapse. The way I see it, buying mid-range furniture I've been needing for a long time, with money I have, falls in a comfortable spot along that continuum. I just wish it felt a little more comfortable. But buying grown up furniture has always been scary to me. Shiner and I will go to the store and look at the finish in person. If we still like it, I think I'm going to take the plunge.

No, it is not the most cautious course of action. Yes, I could bow to my fears about the national economy and put that money in my emergency savings instead. It would get me to my goal a couple months faster. But it seems so... Tin foil hat. I don't know. How much will economic concerns shape your spending in the coming months?