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...And What The Financial Industry Should Keep in Mind

young female consumer finances

We recently dropped our oldest daughter off at college. As my husband and I thought through all the things we needed to equip her with to take on the world, one of the top-of-mind conversations was money management. How to budget it, how to save it, what to do in a pinch, and how to make it grow. Of course, college drop-off wasn’t the first time we had this conversation with her. But with nothing but wide open spaces and a new surge in freedom, the concept of money now takes on a whole new meaning for her.

About the same time we were working up to college drop-off, the Rebel Trend Report on Women and Money was in production. The timing of the report and its findings created a sense of urgency in having this conversation with my daughter. Even though I’ve worked in this industry for years, the findings of the report left me feeling a little unsettled.

Here are a few of the lowlights—

  • Women are significantly more likely to report being uncomfortable managing their finances than men.

  • One-third of the financial literacy gap can be attributed to women’s lower confidence levels.

  • If women don’t believe they are good at money, they often perform as if they aren’t good at money. This can have lasting effects on their financial outcomes.

  • Women are three times more likely to say their savings are inconsistent and based on what they can afford.

woman uncertain about finances

As a mom, equipping my daughter with the tools she needed to feel confident and in control of her financial decision-making was the endgame. But, I also knew that I needed her to exercise these skills for the short time she's still under our care, so I can guide her and course correct if needed. My hope is that once she’s navigating her adult life in her career, she’s an active participant in her financial growth.

Interestingly enough, the things that tripped me up in the conversation are very similar interactions that seem to trip up the financial industry time and time again.

Below are a few of the lessons that I learned when talking about money with my daughter.

Lesson 01

Make zero assumptions about what others think, know, or feel about money.

The assumption I made—
I came into the initial conversation with an assumption that she wasn’t interested in the conversation and fully anticipated I would have to work to get her buy-in.

The reality I met—She was interested. But, she didn’t know where to start and felt overwhelmed by the process.

Assuming disinterest is a common misstep I see the financial industry take, irrespective of gender. This assumption of disinterest seems to be widespread and reinforced in the industry commentary, marketing, and overall approach to reaching women. But, by confusing overwhelm with disinterest, financial service providers run the risk of engendering disengagement entirely.

Quote by Leah Hacker, CEO of Rebel.

We know that when people lack confidence in navigating money management or investment strategies, they’re more likely to lean out and disengage instead of leaning in to learn more.

For women, this behavior is even more complex. Nearly 1 in 3 women are taught early on that talking about money is taboo. But, if we aren’t talking about money—or creating the space to talk about money—then we’re making it difficult for women to lean in on money matters. In fact, by simply not talking about money, we’re actively encouraging them to disengage.

women with personal customer journey

Lesson 02

Create a personalized system that works for the person, not the system.

The assumption I made—
I assumed that I would teach her my system for money management, and she would replicate it. Rookie mistake.

The reality I met—My system for managing money doesn’t work for her. To her, it didn’t deliver on her goals or help address how she works with her money or thinks about her needs. In fact, it frustrated her. In order for this to be successful, the system for money management had to be flexible and personalized to meet her needs.

Women control roughly 33% of U.S. household assets. Women make up nearly 51% of the American population. Women aren’t going anywhere. But, common finance and investment tools don’t necessarily take into account the realities of women. For example, a woman’s career trajectory, and by default, her earnings, may ebb and flow very differently from a man’s. Without considering this as a factor, the resulting financial tools will fail to connect and may actually frustrate women in the process.

Lesson 03

Assume that women are good at money management. And, tell them.

The assumption I made—
This is one I nailed. I knew this one going in, but, was reminded just how important this is in action.

The reality I met—By starting from a positive assumption—that she IS good at money and capable, the assumption was met with confidence and willingness to participate, take the lead, and stay engaged.

Final Thoughts

I walked away from this experience thinking about the research Rebel was getting ready to publish. The stark reality is that the financial industry is waiting too long to engage women in the conversation of money. And, by waiting until women have assets to invest, save, or lend against, the industry is missing an incredible opportunity to deliver value and drive brand awareness, participation, customer loyalty, and trust.

Looking across the saturated landscape of financial services, very few brands actively invite women into the money conversation early on in their financial journey. But guess what? The ones that do have seen a successful return on investment.

Recently, Fidelity grew its Women Talk Money platform from 100,000 to 200,000 community members. Fidelity partnered with influencers, content creators, and social media platforms to drive engagement. What did they find? Well, it exceeded their expectations.

“One of the best ways to become comfortable with something is to talk about it openly and honestly," said Lorna Kapusta, Head of Women and Customer Engagement at Fidelity Investments. "It’s no different when it comes to money and investing.”

She’s not wrong.