A Difference Between Men and Women When It Comes To Money
By: Alicia Holmes, Financial Educator and Coach at Journey to Wealth
I’m not one for generalizations, but I’ve been noticing a pattern. I hope that by calling attention to it, I can help interrupt it.
I recently attended a fin-tech (financial technology) conference, where I conversed with a group of attendees. As usual, I was the only woman. One of the men, who worked in sales, said, “I’m not like any of you guys. I really don’t know a lot about finance. But when I talk to my financial advisor, I’m clear that at minimum, I just want to be in index funds.” When I asked him why, he said, “They have low fees. It’s like investing in the market, so I know exactly when my account is up or down. And over time, the market has done pretty well. Plus, Warren Buffet said so!” I remember having been struck, despite his disclaimer, by his understanding of two very significant investment fundamentals — fees and benchmarks.
By contrast, I have a female acquaintance, a brilliant and highly educated woman, who also claims not to know anything about finance. In her case, she has no idea what an index fund is or how to evaluate fees. She completely outsources all of her financial decision-making to a professional advisor.
Now, you might be thinking, “Well, fine. We can’t all be experts at everything. That’s what advisors are for.” To some extent, that might be true. However, at some point, most of us figure out that if we don’t know anything about car repair, for example, an auto body shop could quite easily quote an unreasonably high price for any repairs we might need. Clearly, it behooves us to educate ourselves about any of the investments we make.
For women of color especially, increasing financial literacy is a critical aspect of overcoming debt, closing the racial wealth gap, achieving access to greater opportunity and building wealth.
In the case of my acquaintance, a little education would have gone a long way. Eventually, she discovered that her financial advisor had given her faulty information and had completely taken advantage of her. The result was profound financial hardship that lasted for years and the loss of a seven-figure appreciation of her original investment.
Again, generalizations are tricky. I’m not saying that every woman behaves as did my acquaintance or that every man is as informed as the man I met at that conference. However, over the years, I have discussed money with many people, and I have repeatedly observed this pattern. Women who are otherwise smart, educated and resourceful tend to totally abdicate responsibility associated with financial decision-making. It is as if there’s a force that shuts them down completely. On the deepest level, many women believe that anything having to do with numbers or money is simply not for them!
Of course, there is very little in our national culture that tells women that math and finance are, in fact, as much female as male territory. In virtually all media, as in so many other aspects of our contemporary society, white men dominate the narrative, and that is particularly true of the financial industry. When my daughters were in elementary school, I saw them begin to lose their innate love of math, so I conducted a significant amount of research that showed potential reasons for their disengagement. For example, did you know that teachers are more likely to rate girls’ math skills lower than boys’, even among girls and boys who have demonstrated the same level of math proficiency? Not surprisingly, studies show that being underrated in math impacts girls’ performance in the subject. Essentially, when we tell girls they aren’t as good at math as boys are, they become less good at math.
There is a great deal of similar data. It's no wonder that so many of the adult women I meet feel like math — and, by extension, finance — is not for them. However, it is important to interrupt this pattern. For women, financial literacy is a gateway to empowerment. For women of color especially, increasing financial literacy is a critical aspect of overcoming debt, closing the racial wealth gap, achieving access to greater opportunity and building wealth.
Sometimes it helps to see our behavior as part of a bigger picture. Merely saying, “finance isn’t my thing,” may seem harmless enough; again, we can’t all be experts in everything. Yet taking a step back and realizing all the ways that we as women are discouraged from excelling at math, and in fields that are fueled by math, reveals a larger problem. When you consider all the money you might be leaving on the table by allowing someone else to make all of your investment decisions for you, you realize that every time a woman leaves her money management to someone else, she becomes part of a world where women are not building wealth. The time has come for that to change.
Alicia Holmes, Financial Educator and Coach at Journey to Wealth
Beginning as a twenty-one year old with virtually no financial assets and very moderate income from working in the non-profit sector, she became a self-made millionaire in her early thirties. By the time she was in her early forties she achieved complete financial independence.
Ms. Holmes worked at New York University for over 20 years and eventually held the position of Director of Financial Operations. In the course of her work, she managed more than 30 million grant/institutional dollars. Her focus for the state and university sponsored programs was the improvement of the life outcomes of young people in under-served communities. Inspired by her wish to help others, Ms. Holmes conducted numerous seminars on financial literacy and wealth building for university students, parents and local groups.
Ms. Holmes was fortunate to have been coached early in life about the path to building wealth. The simple truth she learned at the outset was to move from the consumer mindset of spending to the investor mindset that starts with living below your means and ends with having your savings invested so that your money works for you.
Ms. Holmes now spends her time teaching women of color about building wealth and financial freedom to improve the quality of life for themselves and their families. Ms. Holmes strongly believes that the right money mindset with vital practical knowledge, and powerful intention will create financial freedom for woman and all those important to them.
What drives her to do this work is a commitment that women have power — choice, agency, and comfort — in their financial well-being. Her company, Journey to Wealth, helps women of color achieve financial freedom and live the lives of their dreams. Learn more at: wealthywomanmagic.com
Content may not be reproduced without permission of Women of Color in Fundraising and Philanthropy.®
