Study: Rich millennial women tend be deferential on finances
When Rep. Katie Porter ended her troubled marriage, one thing made leaving easier: For years, she had handled the family’s investments and savings plans, and she was confident that she and her children would be OK.
“It was really important to me to knowthat Iwould be able to feed and house and care for my children that next month, and the month after that,” Porter, D-Calif., said of leaving her husband, who she said had physically abused her.
Not enough women, she said, see competency in personal finance as key to freedom and security.
A study published in June by the Swiss banking group UBS underscored that point. It found that even the most educated and high-achieving millennial women were not as involved as their husbands in long-term financial decision making.
In fact, millennial women — part of a generation thought to have pushed for open-mindedness about gender roles — exhibited less financial independence than women from the baby-boomer generation. Among millennial women living with male partners, 54% said they deferred to their partners for longterm financial planning rather than sharing that responsibility or taking the lead themselves, compared with 39% of boomer women, according to the study, which surveyed 1,320 women with at least $250,000 in investable assets.
The primary reason those women deferred was a belief that their husbands knew more, the study found.
There have been worrying signs of a lack of progress toward gender equality at all income levels. A Gallup survey published in January found that opposite-sex couples
ages 18 to 34were nomore likely than older couples to divide household chores equitably.
The gender gap in financial autonomy is especially critical now, with women at particular risk of getting sidelined during the coronavirus pandemic. Of the 1.1 million people 20 and older who left the workforce in August and September, nearly 80% were women, according to an analysis by the National Women’s Law Center.
The UBS study also found that fewer millennial women than boomer women saw financial participation as necessary for equality, with 76% of millennials (ages 24 to 39) saying it was essential, compared with 89% of boomers (ages 56 to 74).
Many conversations about women’s empowerment are focused on negotiating salary increases, Porter said. “But what good does that raise do you if you don’t know what your savings plan is going to be with that little bit of extra money?” she said. “What good does it do to climb that ladder and get that next higher-paying job with better benefits if you don’t take the time to invest that retirement fund correctly?”
Sallie Krawcheck, chief executive and co-founder of Elle vest, an investment platform for women, said millennials might not have realized that if they do not have financial equality, they do not have independence.
“Younger women haven’t had as many hardwon lessons,” she said.
The UBS study has limitations: It did not survey the boomers when they were three decades younger, the age millennials are today, so it is hard to conclude to what extent the differing attitudes are because of age and acquired wisdom versus other changes. And the women surveyed, all of whom had at least a quarter of a million dollars in investable assets, may not be representative of their generation overall.
Erin Lowry, a personal finance adviser and author of “Broke Millennial,” said one reason boomer women may be more likely to view financial independence as essential for equality was that they have witnessed what can happen without it: Many were raised by mothers who were denied loans or credit cards in their names, she said.
Ruth Bader Ginsburg, as director of the ACLU’s Women’s Rights Project in the 1970s, litigated a string of cases that paved theway for the Equal Credit Opportunity Act of 1974, which prohibited creditors from asking about sex, marital status or the use of birth control.
“I know a lot of millennial women who are feminists, liberated and whatever, who let their husbands handle all the finances,” Lowry said. “It’s very much still an archetype in heterosexual relationships.”