There’s Nothing Gendered About Managing Money

Becoming a financially-literate woman starts now.

Ignorance is bliss.

When it comes to managing your money, this may be some of the worst advice ever given to women. If you don’t know where your money is going, you might wake up one day to find it all gone.

How One Woman Lost it All

In her book Flat Broke with Two Goats, Jennifer McGaha describes the moment that her accountant husband of 20 years finally admitted to her that they were so deep in debt that they were about to lose everything. Absolutely everything: house, car, everything. They could even go to jail.

And she had no idea it was coming.

She had always let him take care of the money, didn’t know how much he made, didn’t even know that they hadn’t filed tax returns in 4 years. Her book describes their fall and eventual adjustments to a new way of living, far below what she had ever expected.

It happened because she wasn’t financially literate.

Not Just A Monster Under the Bed

Hiding from money questions doesn’t make them go away. Covering your eyes, refusing to learn, or letting the numbers scare you will only make things worse. Don’t be like Jennifer; if your partner doesn’t tell you about your money situation, ask. Get the facts, even if they are ugly. Hiding from them doesn’t make them go away.

Like the monster under your childhood bed, bringing the fears into the light makes them manageable.

Most of us know an older friend or relative, married for many years, who was completely lost when her husband died. She didn’t know where the checkbook was, let alone what bank accounts and investments they had. Most of these women eventually got help, from a friend, relative, or professional, became financially literate, and learned to manage their money successfully.

Some, though, continued to hide from those scary number monsters. They ended up with empty bank accounts, overcharged credit cards and failed investments. They make up some of the 13% of women now living below the poverty line. How sad, when a few questions, asked early, could have prevented this.

The Case for Financial Literacy

Knowing how money works, how to save, spend, and manage it wisely, and using that knowledge, is financial literacy. Financial literacy is as important as knowing how to read and write.

When nearly half of American women are single at some point in their lives, not being financially literate is like intentionally buying a ticket for the express train to poverty.

Even for women with partners, financial literacy and responsibility promotes confidence and independence. No woman should ever be, as a woman in Chicago once told Gloria Steinem, ‘…only one man away from welfare.’

When you’re not financially literate, you are at greater risk for domestic abuse, homelessness, and poverty. Without a basic understanding of how money works, and how to make it work for you, you risk being forever on the brink of disaster. It’s stressful, debilitating, disheartening…and unnecessary.

Financial literacy gives you the confidence to strike out on your own, to make decisions about spending, saving, and investments, however big or small. It helps you build your life, or rebuild it.

Becoming a Financially Literate Woman

Financial literacy starts with a simple request: Show me the money. Show me the accounts. Show me the business books. Show me the bills, the investments, the credit card statements. You might be asking your partner, spouse, parent…or yourself.

A partner’s refusal to share financial information is a huge red flag.

Where are all of your financial records? Are they neatly arranged and tracked? In a pile on your desk? The trash folder of your email? Do you look at them when they arrive or avoid looking at them any way you can? Finances are a matter of addition and subtraction. If you can make change, you can manage your money.

The Credit Suisse 2019 Global Wealth Report says that, despite women’s wealth rising in the long term, women are still, on average, less wealthy than men, and that single women in the US had a harder time recovering from the 2008 financial crisis than did single men.

On average, we earn less, save less, invest less, and are less confident in our investment decisions. But there is nothing inherently gendered about managing money. The monster under the bed doesn’t prefer women.

Start Your Schooling Now

If you can read and write, you can teach yourself financial literacy. Stop procrastinating; you’re only feeding the monster and starving yourself. If you aren’t sure where to begin, ask at your bank, community center, library, even your place of worship. Ask a friend who has good money sense.

Still not sure? Try this at home. Make a list in 2 columns. On one side, list everything coming in. that’s salary, social security, alimony, disability, annuities…anything you can count on receiving regularly. Write down what it is and how much you receive. That’s your total monthly budget available.

On the other side, write down all of your expenses. All of them: the rent, utilities, Netflix account, daily coffee, student loans, lottery tickets, credit card payments…everything you can think of. That’s your monthly spending.

Now compare the two. If your income is available budget is larger than your spending, give yourself an ‘atta girl!’

If it’s not, take control.

Cross out everything that you can live without until your spending is less than your income. Then stop spending on those things. To make that easier, think of a goal: paying off a credit card balance. Saving for a new couch. Anything that is meaningful to you.

If you can’t reduce your spending to below your budget, you need to get creative. Can you take in a roommate to reduce the rent and utilities? Find a second job? Figure out what the biggest part of your spend is (usually rent or debt) and work on reducing that.

This exercise teaches you basic financial literacy, gives you control, and sets you up for more meaningful discussions with a credit or financial advisor. With money, knowledge is power. Financial literacy gives you the power to control your money. Take it for yourself.

At tax time, talk with your tax preparer or be involved in preparing your return. Then look at it -does it make sense? Do you recognize all the accounts listed? Are any missing? If your name is on the return, you are responsible for the content. Don’t contribute to tax evasion or fraud, or build up penalties, because you are too lazy or too intimidated to ask questions. Like the monster in the closet, you must face this to overcome it.

Remember, any financial or tax professional should be working for you. That means watching what they do with your money. You’re hiring an advisor, not a fairy godmother.

Now is the right time

Whatever your age, stage, or financial status, the right time to become financially literate is now. Today. Don’t spend another day cowering under the blankets. Drag that monster out into the light and kick its butt into order!

I believe every woman should understand and control her own money.

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