When was the last time you sat down with your spouse and asked each other, ?What is the best way for us to invest our money?? Last week? Last month? All signs point to never, according to a handful of national statistics. Despite bigger paychecks, many women remain hesitant to get involved in their family?s finances despite research that consistently indicates that women make better investing decisions.
According to a survey conducted by Prudential?earlier this summer,?out of 1,400 married women, nearly 55 percent are the primary breadwinners in their households?and yet, only 35 percent of women reported sharing the role of financial decision-making with their partners. (Interestingly enough, just 21 percent of men feel that the financial decision-making is a shared responsibility.) Any which way you look at it, it?s clear that women?s financial involvement lags disproportionately behind their household financial contributions.
The revelation that men are still controlling the finances?overwhelmingly so?is significant not just because women ought to take the opportunity to play a bigger role in their own economic futures, but because research has shown that women actually make better financial investments over the long run.
A study by Bloomberg L.P. and The National Council for Research on Women?conducted between 2000 and 2009 showed that funds managed by women significantly outperformed those run by men, with 9 percent returns for women versus 5.82 percent for men.?
Why women make good financial decisions
It?s been a long-held belief that women?s aversion to risk is also their greatest downfall in investments, but the research has shown that risk aversion allows women to make sound financial decisions over the long run by being much more conservative with their investments. Women trade this way because they aren?t as confident?or perhaps are not as overconfident?as men when it comes to investing, a 2011 study by Barclays Wealth and Ledbury Research found.
Perhaps amplifying the situation, studies also suggest that under stressful situations, men engage in an even greater frequency of risky behavior whereas women actually moderate their behavior and make more conservative?in the case of investing, financially favorable?decisions.
Why women should take over investments
If women at large have demonstrated the capacity to make better financial investments than men, why are only 35 percent of women taking an active role in their finances at home?
The 2009 National Marriage Project report, ?The State of Our Unions,??found that it would be most beneficial for a woman to manage the investing while the husband determines the day-to-day budgeting and spending. Women tend to view investments as a way to secure their family?s financial future, whereas men tend to view it with a competitive edge, needing to out earn their colleagues. If men managed day-to-day spending, their drive to compete would be a moot point, and women could be free to manage the investments.
You?re selling yourself, and your entire family, short by taking the financial back seat. Take control of your finances, and take control of your financial future.
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