Look Who’s (Not) Talking

I just read a new report about women and their money—and do you know what it proves conclusively, irrefutably?

It’s time to stop studying women and their money!

Like so, so, so much research in this area, the report released in November from the Transamerica Center for Retirement Studies and Aegon, a financial services company, offers a thorough retread of all the bad news that’s already been featured in 50 or so similar studies in the last few years:

  • Women are ambivalent about managing their money.
  • They’re worried about retirement, yet…
  • …most aren’t saving or planning for their futures.

But there was one thing that made my jaw hit the keyboard.

Going global

First, the TCRS/Aegon study is international. That’s the hot new thing, btw. Financial companies have exhausted the sad stats about women in the U.S., so now they’re looking overseas. Anyway, what this study found is that women in many of the 14 other countries surveyed are even more ambivalent and clueless than American women. (Interesting, if not exactly heartening.)

For example, only 20% of women overall said they were on track to have the retirement income they’d want. (That’s pretty typical of these women-and-money studies, as was the point that 49% doubted they’d retire with a comfortable lifestyle.)

Far more intriguing were the differences in women’s financial views from one country to the next. Only 7% of Japanese women said they were on track for retirement compared to 24% of women in the U.S., for example.

Nearly 90% of Polish women said they doubted they’d have a comfortable lifestyle in retirement, versus 38% of U.S. women.

As my colleague Richard Eisenberg noted in his piece on Next Avenue (a great site, if you haven’t checked it out), some of the data from other countries were so depressing, they kinda made American women look more on top of things.

A shocker

But what really stood out from all the various stats and charts was how many women simply didn’t know whether they were on track for a comfortable retirement or not. All told, 40% said they didn’t know.

Now, I can imagine knowing that you’re not prepared for the future, or that you haven’t saved enough. But this is worse in a way: 40% of 7,956 women surveyed in 15 different countries, just don’t know where they stand financially.

Use your words

Like most of the research that emerges from big financial companies, this study landed on a proactive note about getting women auto-enrolled in 401ks and other retirement plans, and offering these plans to part-time workers (since women are far more likely to work part-time than men are). The logic being: To help women catch up on the savings front, they need greater access to actual tax-deferred savings accounts.

YES to all that.

But EZ-access to 401ks does not address the disturbing problem of the unconscious financial state of a pretty big chunk of the female population. Not knowing suggests that even if you had a retirement account, and you were throwing some money in it, you still might have your head in the sand.

Giving more women access to 401k accounts would help—yes, yes, YES, she said, yes. But something else has to happen first, or at the very least—at the same time.

We (women) have to start talking about money with each other, with the same frequency and passion that we bring to:

  • our kids
  • our weight
  • our obsessive analyses of work (or family) dynamics
  • True Detective

But I do talk about money, you protest.

Do you? Or do you mainly talk about what things cost? There’s a big difference between venting about your rent or property taxes going up—and asking your best friend how she chose her target date fund, and whether she and her husband are saving the same amount in their 401ks, or different amounts because his company has a better employer match?

Target date fund…401k…Employer match

What I’ve found over the many years I’ve been gnawing on this bone is that women crave to be fluent in finance, but they feel ashamed and self-conscious when they aren’t 100% sure they are using the vocab in the right way.

I get that. I can’t open my mouth about music of any genre for fear of sounding like a geek who spent her teenage years studying ballet instead of listening to the Red Hot Chili Peppers. Which is true.

So my question now is: How do we begin—no, NOT “the conversation.” Every flippin thing today is a “conversation.” What a fakey marketing word. I want to just talk about it. Let’s get women talking about money. That’s where the knowledge starts and confidence can take root.

Thoughts?

Why Wall Street Doesn’t Get Women

mars venus money screenshotFor several years now I’ve been sitting in the stands, watching (and sometimes reporting) on Wall Street’s stuttering attempts to reach female customers. Good news: There seems to be some actual progress now, as I wrote in an essay for the Sunday New York Times this weekend. (There’s the headline on the home page tonight, “Mars, Venus and the Handling of Money” pretty much right above these words.)

Finally, financial companies are starting to take their cue from women’s distinct financial style and outlook—and it’s high time they did. I’m not sure why it’s taken so  long for the Ameriprises, Vanguards, and Fidelities to digest the fact that women really do handle their finances differently than men do.

One big hurdle, I think, is that the financial gap between men and women isn’t obvious at all. In fact, as more women become executives, CEOs, Senators (or chair of the SEC), there’s a fingers-crossed wishful hope that they’re also on par with men in terms of basics like money management. They’re not. Let’s use the disputed statistic that women earn about 77 cents for every dollar men earn (a disparity that doesn’t exist in every field, etc., etc., OK). But even taking 80% as a target for financial parity, women overall are nowhere close to men in terms of financial security. The average retirement account balance for men was $95,675, a 2011 study by Vanguard found, and $58,833 for women. 

Another problem is that many women would rather believe that they themselves, personally, have an issue with money. The idea that we’re all sisters in this strange quandary sparks ambivalence for many women. When I was writing this NYT piece (sorry about the braggy second link, BUT I AM SO PSYCHED), cough, where was I? Oh right…when I described what I was writing to a friend she scoffed at me. Scoffed! “That sounds like some old Ms. Magazine article,” she said.

Meanwhile, like so many women, this dear, dear friend feels just as alienated from capital F finance as, well, about 10 million other women. That’s a conservative guesstimate based on the aggregate research in my brain, and I’ll try to actually find out what the real number might be—but it’s a lot.

But women shouldn’t feel ashamed, embarrassed or squidgy-cringey-can-we-change-the-channel-now. The way money works is pretty incompatible with how women think of their finances (and how most women view money fitting into their lives). But that’s changing, thanks in large part to the super-smart cadre of women who are in leadership positions at the big boy companies like Vanguard, Fidelity, Ameriprise, Wells Fargo, and others. 

But it makes me laugh that even now, with all this outreach and new programs and initiatives, these companies’ efforts to understand and accommodate women still only add up to a toe in the water. A pinky toe. Meanwhile, here’s a video series from Wells Fargo that’s got the right idea, and this is my fave of the bunch. Let the money games begin!

What That Lego Movie Will Cost You

lego movieIt cost $60 million to make the new Lego movie, but as I sat there watching it with my seven-year-old recently, all I could think was: Dear God, how much is it going to cost me?

Even after I took my 3-D glasses off, the churning in my stomach wouldn’t stop because every scene seemed to feature a few hundred potential Lego kits that the company will soon sell to me, my child, and assorted relatives. And yours, too, by the way.

In the first 30 minutes alone I identified 18,679 towers, vehicles, ships, towns, oceans, rainbows, submarines, animals, superheroes and other stuff that will soon arrive in stores—if it’s not there already–packed into boxes with plastic bags of plastic parts and stacks of directions that will make you want to run to IKEA and assemble something equally frustrating, but actually useful.

And what’s the damage? Well, let’s say that my estimate of 18,679 is a tad overblown. So I’ll whack off about 75% for a more realistic estimate of 4,600 new products spun out over the coming year or two or three (in my world, that’s three birthdays, three holidays, and a certain amount of briber—um, incentives). So, take 4,600 multiplied by an average of, say, $12.95 (the Old West kit and the Pirate Ship are going to skew high), for a modest outlay of about $59,500, total.

A year of private college, is what we’re talking here.

But you can take out loans for college. You can even sock away money in a tax-deferred college savings account known as a 529 plan. But nobody does that, let’s be honest, because we’re all buying Legos.

Listen up, my fellow parents, before the siege begins: I have a confession. I buy those stupid Lego kits blindly—because they keep my popcorn-popper kid quiet for an hour or two (which is crucial in a Manhattan apartment); they occupy his friends when they come over (which is crucial no matter where you live); and—and this is the most embarrassing part of all—I believe they are making my kid smarter. Because they come from Scandinavia.

Oh yes. I see it in your eyes. You’ve been sucked into the Nordic Lego myth too—it’s the Baby Einstein of our parenting generation. You look at those teensy parts and you think: Whoa, this builds fine motor coordination.

You look at the impenetrable directions that have given you an ulcer, lo these last three years, and you think: Ah, but this develops persistence.

You look at the other kids, the master builders who invent off-book Lego creations, and you think: That kid is better at Legos than my kid, so this stupid toy must be doing something.

The company can smell your anxious sense of competition—and they leverage it. They squeeze you into that tight dark space in your brain where you can’t think straight because you must give your child Every Possible Advantage. Meanwhile, you block out the reality, proven by studies conducted by people who know people at NASA on Facebook, that the so-called gyre—the whirling vortex of plastic crap in Pacific Ocean that’s the size of Texas—is 69% Legos.

You willingly forget that throughout this year, thousands of parents will shuffle into the kitchen to make their morning coffee—and suffer a paralyzing foot puncture by a tiny red block the size of a rat’s brain.

And then you cover your eyes and pull out your wallet and spend thousands of your post-tax earnings on a series of $9.95 or $29.95 kits to make a “spaceship” or “castle” that falls apart within 15 minutes after it’s assembled. What kind of investment is this? Do you get any sort of return? Really?

The only thing I know for sure is that it’s cheaper to buy yourself some free mom time with a Lego kit than by hiring a babysitter. Other than that? I just saw some new data on the “crazy” things people have paid for with credit cards—car payments, adult entertainment, bail. None of that surprised me. I just want to know what they spent on Legos.