Ladies: It’s Time to Own Your Financial Confidence

Ladies: It’s Time to Own Your Financial Confidence

The following is a guest post by Hallie Kraus, CRPC®, who works as a financial planning associate at The Humphreys Group. I loved hearing Hallie’s perspective on empowering women to better manage their financial future!

Over the past few years, much ink has been spilled over women and their lack of confidence. Female executives have written books with several chapters dedicated to the topic. In 2014, one of The Atlantic’s cover stories popularized the term, “the confidence gap,” and examined the empirical research on the issue. Even beauty magazines now have subtitles like, “Eight Qualities of Highly Confident Women,” and “Your Guide to Killer Confidence,” framing confidence as a supposedly-easy character trait to adopt while you’re waiting in line at the grocery store. 

Photo by Kobu Agency on Unsplash

Despite being hackneyed, there is good reason for the discourse around this topic. An overwhelming amount of evidence has shown that the confidence gap has been a problem historically. In the world of finance, this concept has manifested itself by depicting women as timid, indecisive investors, insecure about their financial knowledge and the decisions they make with money. But there are signs that the tides are changing — so much so, in fact, that I would argue it’s a myth that women lack financial confidence.

One reason women are perceived as being unsure of themselves is because they often make decisions differently than men do. We live in a culture that applauds people who speak and act authoritatively, don’t hesitate or mince words, and make decisions quickly (for better or worse). While there are certainly women who embody these characteristics, there are many more who tend to think things through before they contribute to a conversation or prefer to gather more information before making a decision. This quality can be easily misinterpreted as a mark of indecisiveness and insecurity when, in fact, the woman who embodies it is simply taking time to reach a well-informed decision. 

Research has shown that when complex situations present themselves, women are more likely to evaluate the nuances in the details, while men tend to focus on fewer pieces of data. As you can imagine, this often decreases the quality of the man’s decision-making process and boosts the quality of the woman’s process. 

Making decisions about money is complex and nuanced, something women are good at — so where is the disconnect? Women simply want to know more before making an important financial decision. Merrill Lynch recently pointed out that even among men and women with similar levels of financial knowledge, women are more likely to say they don’t know enough. In fact, many of our clients have walked into our office believing they were not adept at handling their finances when, in actuality, they just needed to have their questions answered in a straightforward and transparent way. 

The good news is there are early indications that societal changes are improving women’s “confidence” around money, particularly in the younger generation because we are gaining more access to information. Women ages 25–34 are more likely than their elders to report they learned about finances from one or both parents (62%, compared to 45% of older women), and over half (51%) say they are very confident in their investing skills. This final statistic is in stark contrast to their elders: Only 36% of women ages 35–49, 14% of women ages 50–69, and 11% of women ages 70–84 said they feel confident in their investing skills.

Photo by Sharon McCutcheon on Unsplash

So, how can we ride this new wave of financial confidence? Let’s start with what we already know:

  • As women, we discount our financial savviness without considering areas of our lives in which we are already smart about money.That includesfamily budgeting, volunteer work involving financial management, managing medical issues, and advocating for family members and loved ones. 
  • Women are adept at picking up financial concepts if they are explained without unnecessary jargon or obscure concepts. 
  • If we are clear about our goals and values, we’ll find making decisions can be simple and straightforward.Once you have defined what matters most to you, financial decisions will fall into place more easily. Aligning our financial resources with our highest priorities and values can provide relief and a sense of certainty. 

My Advice to You

  • Find your tribe. As women, we generally prefer to learn in group settings, which are much more supportive and collaborative. We learn from each other as we share our hard-won wisdom. Whether the subject is personal finance or meditation, group learning may be just the ticket. 
  • Embrace self-reflection. Understand that self-reflection leads to self-knowledge and is a natural precursor to building confidence.Spend some time — structured or otherwise — reflecting on what you care about most. If you’re feeling stuck, reach out to your own network of women (whether it be your mom, sister, friend, or mentor) for support.
  • Persist. If you meet with a financial advisor who answers your questions with spin, insist on clarity, transparency, and an absence of condescension.
  • Talk about money unapologetically. At The Humphreys Group, we regularly host “conversation circles” for women who are interested in straightforward and authentic discussions focusing on the non-numerical aspects of personal finance.We talk to each other about what matters, discover ways to apply our unique strengths to our finances, and share our stories, experiences, and collective wisdom about money. Everyone is welcome — if you’re based in the Bay Area and interested in attending, email me to learn more! 

And if you’re interested in learning more about this topic, click here to get a copy of my new, co-authored book, “Rewriting the Rules: Telling Truths About Women and Money,” which dispels the other myths that have held women back for too long and offers strategies to harness strengths they already possess — in finance and beyond.

About Hallie

After completing her degree in psychology at the University of California, Santa Cruz, a career in the financial services industry may have seemed like an unlikely path for Hallie Kraus. But her professional calling has always been centered around helping people make more proactive decisions with their finances, rather than reacting to fear or anxiety. After working as a credit counselor with a nonprofit agency, and then participating in Merrill Lynch’s financial advisor training program, Hallie discovered that she enjoyed connecting with people and exploring the more emotional side of money, which brought her to her current role at The Humphreys Group. Today, she enjoys providing personal financial planning, retirement planning and investment advice to women, helping them increase their financial stability and preserve their wealth.

Sources

  1. “Are Women Better Than Men at Multi-Tasking?,” BMC Psychology, October 2013
  2. “Women and Investing: A Behavioral Finance Perspective,” Michael Liersch, Fall 2015
  3. “Ameriprise Study Reveals More Women are Taking Command of Their Finances,” Ameriprise, June 2014
  4. “Assessing the Landscape, Female Investors and Financial Advisors,” State Street Global Advisors, 2015

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