Own Your Financial Literacy
With having just celebrated another International Women’s Day, I wanted to write about a topic of key importance to elevating women – not just in the workplace, but in society as a whole. There is almost no issue more important to achieving the equality, security and advancement we seek than financial literacy. Eight in 10 women will be independently responsible for their financial well-being at one point in their lives. We are living longer, and half of all marriages are still ending in divorce.
Despite this, 56% of women are leaving investment decisions to their husbands – Millennial women at an even higher rate. What’s more surprising still, even in homes where women are the breadwinner, 43% still leave major financial decisions to their husbands. We are more educated than ever, holding more leadership positions and have access to more information than ever before, so why are we giving up our financial power at alarming rates? I decided to speak with my friend Binney Wietlisbach, President of The Haverford Trust Company, to offer some advice and insight to women who want to take a more active role in their financial security.
MB:
Binney, I know your career is about more to you than just managing wealth – can you talk about the personal experience you’ve had that led you to passionately promote women taking a more active role in their finances?
BW:
I was always a numbers person, and I loved working with people, so the financial industry was a great fit for me. However, I watched my mother end up in a difficult situation because she spent much of her life taking a passive role in her personal finances. She was fortunate enough to be born into a family of privilege and was a very smart woman. In boarding school, she was among the top 1 percent in mathematics before going on to Bryn Mawr College, getting married and starting a family. She eventually became the beneficiary of a family trust. After her second marriage, her then-husband moved us all to a community-property state that entitled him to her assets. The marriage ended in divorce and he abandoned his two small children from a previous marriage and left them in her care. Thanks to the trust, she was able to focus on taking care of us all without having to work, however it shocked me to receive a call from her 15 years later asking for my help. The income from her trust had dropped significantly over a 10-year period, and she was worried she could no longer keep her home, nor continue to put my two brothers through college. I learned that the trust officers had never even spoken to her in 18 years of managing her trust. It really opened my eyes to how easy it is for very intelligent women to end up financially illiterate.
MB:
I recently wrote a blog post about knowing your bandwidth, discussing how you can only be effective with so much on your plate. With many women working outside of the home, yet still handling the majority of household duties as well, it seems as though managing investments and long-term finances is delegated to one partner out of necessity – typically the man. Why do you think that is, and how can women think about this differently so that it doesn’t feel like just one more thing they have to be responsible for?
BW:
Chores, cooking and childcare can be split among two partners. I always tell men and women that managing your finances is not a responsibly you can abdicate. Both partners must be actively involved.
I think the biggest misconception about financial planning and management is that it’s something you have to dedicate time to each week or month. It can be as simple as being present at a meeting with your financial advisor; taking a look at your investments together at the end of each year; knowing how much you have and in what types of accounts. It doesn’t require an incredible amount of specialized knowledge to be involved. If I’m working with a family, I tell them up front that it’s not acceptable to be only meeting with one partner – I insist that both are always a part of the conversation. Any trusted advisor should not allow only one of the partners to be there.
MB:
What are some of the key things women should be doing or thinking about when it comes to their finances?
BW:
If I had to identify one thing that’s most important, I’d say make sure you’re participating in a 401k plan, or other retirement account. Beyond that, make sure you’re aware of how that money is being invested. There are many different options for how to invest; know how much is in stocks, bonds or cash. For example, your 401k may consist of what we call stable value funds – which offer almost no growth. For younger people with plenty of time before retirement, it is very likely that stable value funds won’t provide the level of growth needed to achieve their retirement goals. Although past performance is no guarantee of future results, and while the stock market is going to have the most volatility of any of the major asset classes, it’s historically been the only way you can outperform inflation over time. Knowing how you’re invested as a family is an important part of making educated financial choices.
I also recommend that women make sure they have a trusted team around them. That may be an experienced real estate professional, a financial planner, an accountant, an attorney – experts that you know have your best interest in mind. Sit down with these people, ask them questions, and if you feel unheard or demeaned in any way, they’re not the right fit for you. There are times in your life when you have to really pay special attention to your financial life – getting married, having children, divorce – and that is not when you want to be meeting your trusted advisors for the first time.
MB:
How can women take an active role to increase their financial literacy?
BW:
I go back to the idea of understanding where you’re invested.For example, not many people realize that employers must offer education on the retirement plans they offer, and on how to understand how your funds are invested. Go to your HR department and ask when the next time education will be offered.
Pay attention to what’s happening in the markets. You don’t have to get caught up in all of the hyperbole and hype, but be aware if there’s something going on that may affect you. Find publications that you can read quickly during any downtime – I like DailyWorth.com, an email newsletter subscription designed to help women manage their finances. Seek out events or education seminars when you can. At The Haverford Trust Company, we started a Speaker Series for Women.I felt it was a great way to help educate, empower and inspire the many women I see not taking an active role in the investment process. For the past eight years we’ve held events where women can learn, network and share ideas related to finances, investing and more . What it comes down to is simply taking the time to evaluate your assets and liabilities (like loans, credit card and other debt), and ask your partner to sit down and discuss your finances. That’s a great first step to building your financial literacy!
I hope that this conversation helps you to take an honest look at your own financial literacy, and if you’re not actively involved in your finances or are unaware of how you’re invested, that you’re inspired to act. Thank you to Binney for all of the work she does to help empower women to understand and manage their finances. I would also love to hear from all of you — do you consider yourself financially literate? How do you find the time to take an active role in your finances and investments? What are your biggest questions when it comes making decisions about your financial future?
Mrs. Binney Wietlisbach is the President of The Haverford Trust Company, and has been with the firm since 1992. Binney has worked in the financial services industry since 1985. She is a member of the Executive Committee, a voting member of the Investment Selection Committee, and a member of the Board of Directors of The Haverford Trust Company. She’s been recognized with numerous awards for her leadership and dedication to empowering other women.