Why women stress about money

2013-08-04 14:00

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Women are becoming powerful in their own right, yet for some reason many are still reluctant to take control of their money. This Friday, while celebrating Women’s Day, spend some time reflecting on your attitudes towards money and how they affect your financial freedom

Irrational fear extends to women across the spectrum of life and affluence

One of my favourite quotes from Dave Ramsey’s Total Money Makeover is about women’s attitude towards money. He writes: “Somewhere down inside the typical lady is a ‘security gland’ and when financial stress enters the scene, that gland will spasm. This spasmodic gland will affect your wife in ways you can’t always predict.”

I showed my husband this quote as proof I am apparently normal when I get all stressed out doing our monthly budget.

Despite the emergency fund, the budget and the retirement fund, there is always fear deep down that things will go wrong.

So it came as no surprise that a survey conducted in the US found women had a huge fear of losing everything and becoming a “bag lady”.

The 2013 Women, Money and Power Study by Allianz Life Insurance Company describes this as “an irrational fear that extends to women across the spectrum of life and affluence”.

This affliction affected more than half the women surveyed, with nearly a third earning` more than R2?million a year.

What is even more concerning is that 46% of “women of influence” shared this fear.

The survey describes these particular women as well-educated, earning higher than average incomes and either having their own business or likely to have achieved a senior position at work.

These women have a higher need for financial control and more desire for increasing their financial knowledge. They are also most likely to have an adviser and a plan – yet still harbour fears about money.

Financial adviser Sunel Veldtman, author of Manage your Money, Live your Dream, says this is equally true of South African women and is not linked to income or assets.

“I had a meeting with 10 wealthy women and there was agreement that women continue to have an underlying fear about money, even if there is more than enough and they are knowledgeable” says Veldtman.

What drives this fear?


1 Motherhood is a major factor affecting a woman’s ability to provide. It is especially relevant here because more than half of mothers are raising their children single-handedly. In the US, there are fewer married women today than the combined number of single or divorced women.

“Motherhood plays a huge role. Women who are not earning and not involved obviously have more fear,” says Veldtman.

The US survey found that no matter what their family situation, families leave women too busy to address financial planning. And not dealing with their finances leads to increased anxiety.

The fear of independence

2 The Allianz survey also found that women felt that being financially independent could harm their chances of finding a partner, with 42% of women stating that financially independent women are intimidating to men and will end up alone.

Veldtman says that in her financial workshops she finds that a woman’s position in a relationship also affects her approach to money because most women value relationships higher than financial security.

“They are often too scared they’ll offend or lose their partners if they ask the difficult and direct questions.”

Not being heard

3 Women often find that the financial industry is oriented more towards serving men. They tend not to use a financial adviser. The majority of women in the Allianz survey found this to be true and also admitted that they found financial information hard to understand.

A local survey on Women’s Money Matters, conducted by Visa, found that only 27% of women surveyed used a financial adviser and many said they did not feel they had enough knowledge to make investment decisions.

As the Allianz survey highlights: “There’s still much work to do in assuring women that being financially capable can have a hugely positive impact on their confidence, long-term security and enjoyment of life, and financial professionals need to understand that women generally place a high value on interpersonal skills and feeling personally cared about.

“’Women tend to prefer a more social way of learning about financial information, especially in a group with others of similar life experience.” This is why savings clubs or financial workshops are particularly popular among women.

“The fear dissipates somewhat when women are more educated in finance and more comfortable with the subject, and have a trusted adviser,” says Veldtman.

It’s not just paranoia

4 The reality is that women do face far more financial risks than men. Our fears are linked to our “survival brain”, as described in the book The Female Brain by Louann Brizendine. As women are more vulnerable, so our fears are more prevalent.

Women earn less, they live longer during retirement and the majority of mothers are single breadwinners. Figures from the 2011 census show that the annual average income for a female-headed household is R67 330.

This is a 141% improvement compared with 10 years ago, yet it remains less than half the income of a male-headed household, which is about R128 329 a year.

Women are expected to live seven years longer during retirement and on average have lower retirement provisions than men, often due to time out of the workforce to raise children.

The Allianz survey found that the number one worry for women was running out of funds in retirement. This fear was even greater than losing a spouse or partner.

Taking control

5 While our fears are not necessarily irrational, our reactions to them are. As the more financially vulnerable sex, we should be doing more to educate ourselves and take control of our finances.

Yet Visa’s International Barometer of Women’s Financial Literacy found that on average women have less emergency funds and are less likely to follow a budget than men.

We stress more about money, but do not do enough to take control.

Linda Smith, financial coach and publisher of the annual Linda’s Abundance Diary, says in some ways this is understandable as traditionally men were the breadwinners and took care of the finances. Now that women are doing it themselves, we need to develop the same level of confidence.

Taking control is the only way to overcome our fears and have true financial freedom. In the US survey, 67% of women reported that becoming more involved in managing their finances had made a real difference to their quality of life.

While women may be more wired to worry about the future and money, Veldtman says this can be lessened through education and financial clarity about how much we own and whether it will be enough. Veldtman says women also benefit from connecting with women’s groups and finding trusted financial advice.

Smith says women need to be talking more about their money. “Start by writing down your feelings and getting it on paper. Discuss these feelings with someone and find a way to deal with the issues,” says Smith, who suggests forming money clubs or finding a financial coach.

Smith says when talking about your money, you need to stop judging yourself and believing you “should have started earlier”, “should have saved more”, “should have spent less”.

“You are where you are now. Let go of the past and find a solution,” says Smith, who adds that the most important starting point is gratitude.

“Be grateful for what you already have.”

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