Issue 54 / Who Handles The Finances Better? Men Or Women?

by Rachna Sethi

Who Handles The Finances Better? Men Or Women?

Jun 17, 2016

As the role of the family's money manager has evolved over the years, we take a closer look at who does a better job holding the money purse.

Some of you may be thinking it’s time to stop competing and pitting the genders against each other. We couldn’t agree more.

Traditionally, South Asian (and many other) cultures had men as the earners with women managing the household duties. As many countries evolve to have more gender equilibrium in education, an increase of women in workforce, changes in maternity/paternity care policies and such, it’s important to understand the implications (if any) they may have on our views pertaining to gender and money. Is one gender better at managing money than the other? Is one more likely to run the household finances than the other?

In 2015, despite being almost 50 per cent of the workforce, research showed a gender gap in pay of 21 per cent (women earning 79 cents for every $1 made by men). Unfortunately, that difference isn’t accounted for when it comes to life expenses. Women earn less but can still have the same mortgage and interest payments. Research in the U.S. showed that 66 per cent of women, compared to 33 per cent of men, have credit card debt. India and the U.K. also reveal women in higher debt.

We caution making rash judgments that the numbers prove men are better at handling money. There’s no scientific research that demonstrates that. Until we reach pay parity and the amount of single-income households run by fathers becomes equal to that by mothers, it’s illogical to come to a conclusion on one gender being better than another with money.

What we can do is highlight the importance of everyone having an informed approach to money management. Bills piling up can create mental, physical and emotional tension. With money listed as the third leading cause for divorce, we can’t deny the impact finances have on a home atmosphere. Families need to decide it’s easier for the household to have one person oversee the general finances based on time, availability and skillset removing any gender expectations and cultural norms out of the equation.

Below are gendar neutral tips to help with money management:

Your family piggy bank is a team effort.

Photo Credit: www2.credilink.com

Share your salary information: Single or in a relationship, you have to be aware and honest about your net salary to realistically manage financial expectations. Maybe as a husband you always thought you’d earn more than your wife but in reality you don’t and that’s okay. A joint bank account for general expenses (e.g. mortgage payments) is a good idea to ensure there’s transparency in managing the bulk of income (though what you both contribute may differ based on salaries). If you want some financial freedom, you can have separate leisure accounts (good for gift buying, etc.).

family finances budget

^{Creating a budget can bring you closer together.

Photo Credit: www.lifehack.org}

Budget time for a budget: Plan an annual budget that is broken down monthly. It should demonstrate hard expenses versus income. The amount leftover should be used for an agreed upon allocation on groceries, entertainment and savings. Should large unexpected financial obligations arise (e.g. home renovations), revisit your budget to reallocate funds. Taking time to create a budget also gives you time to connect with yourself or your partner: turn it into a date day or head to a cozy coffee shop.

Financial Adviser Budget Consultation

It helps to get help.
Photo Credit: www.riyaz.net

Know what you don’t know: Admitting areas of personal improvement is never easy but neither is dealing with debt. Managing money isn’t everyone’s strong suit (and it’s not a gender specific skill). Approach the conversation on who within the relationship is best suited (factor in ability and availability) with humility and openness. If you don’t have the time or talent admit it without judging yourself (or partner) and get help from a financial advisor (yearly, monthly or single sessions are available). The cost will be worth it if it helps you reduce debt and stress.

^{Cut credit cards if you can't control your craving to charge.

Photo Credit: www.businessinsider.com}

Curb your credit card cravings: According to financial expert Gail Vaz-Oxlade, our brains release endorphins when we spend money. Anyone that has left a shop with a bag and huge smile can relate. With interest rates ranging from 9 to 28 per cent, if you can’t pay off the purchase by the end of the month, don’t charge it. Kishan Mooljee CPA, CA, partner at M & Co. Chartered Accountants cautions against minimal payments. “If you make $1,000 purchase on your credit card with an 18 per cent annual interest rate and only make the minimum monthly payment, it would take you approximately 12 years to pay it off. With the interest rate creating an additional $1,400, that $1,000 purchase actually costs $2,400. Remember credit card companies are also a business, they allow for and promote minimum payments because they make more money over the long haul.”

love money

^{Love for each other has to come before love for money.

Photo Credit: www.zawaj.com}

Squash secret spending: Do not open additional credit cards or bank accounts without advising your partner. It can be hard to deny the lure of a shiny new purchase and perhaps you think keeping it a secret will avoid immediate conflict but understand that a loss of trust can create a long-term problem.

^{Main Image Photo Credit: www.eyesonnews.com}

Rachna Sethi

Author

Rachna (@thesassyspiritual) is a graduate of the Applied Mindfulness Meditation program from the University of Toronto, a certified Educator with two bachelor degrees and a diploma in Art Therapy. She's dedicated to living with a compassionate approach. Committed to helping people integrate Mindfuln...