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Do women make bad financial decisions?

Josh Appel on Unsplash

Wait, this is not an article on gender-based financial stereotypes. The motivation for it stems from my observation of women who do happen to make short-sighted financial decisions in their relationship, and by my quest to look for answers.
During my research, I had the pleasure of interviewing Caroline Bell, Managing Director of FinMarie, and Jamie Lee, negotiation coach for women, two amazing professionals whose work I truly admire.

 

I work with conflict, and when I work with relationship conflict between men and women, money often plays a role. I have observed a recurring pattern of financial power imbalance between men and women, which surprises me because I thought that we had already broken down many barriers. How come women sometimes recreate in their relationship the inequality they fight against in the workplace?

A recipe for disaster

While the majority of women I get to work with in mediation or coaching don’t give up their career altogether when they marry or have children, I do see many who reduce their power to stand up for themselves and be 100% involved in the discussion of finances.

This happens in many ways, for example:

  • Delegating all financial decisions to their spouse
  • Surrendering control over their savings in the unquestioned assumption that it’s true love only if all assets are shared
  • Failing to raise the topic of estate planning for fear of upsetting their partner or coming off as greedy

These decisions can make women poorer because they affect their ability to face the unprecedented turns of life. It hurts to see women who don’t dare to exit a toxic relationship because they would face ruin if they left, or women who thought marriage meant being set up for life and are left with very little by their divorcing husbands. It doesn’t have to be this way!

Old attitudes die hard

For centuries, women have been taught to put the needs of others above their own. Could it be that this unspoken norm is still ingrained in our subconscious?

I have asked Caroline Bell, who has been giving financial advice and dealing with couples for 27 years and is now Managing Director of FinMarie, an online financial platform for women. Caroline doesn’t believe that there are gender-based differences in financial decision-making and that it’s rather a matter of personality. What Caroline has noticed many times, though, is that smart, intelligent women sometimes make not-so-smart financial decisions for the benefit of the relationship, especially when they are the main income earner. Societal expectations are (“more in Europe than in Australia,” Caroline adds) that the man is still supposed to be the provider for the family, and women who earn more sometimes willingly surrender control over their assets for fear that a power imbalance would make their partner look bad. 

Long-term consequences of limiting beliefs

Even though not all women are the same, I do believe that the shadow of these outdated gender roles might have contributed to shaping some women’s limiting beliefs about gender and money.

I have asked Jamie Lee, a leadership and negotiation coach for professional women in
male-dominated industries. Jamie firmly believes that it is our thoughts, not our gender, that determine our decisions. How we think about money and our ability to create wealth will inform our actions. Actions that are born out of limiting beliefs about money and gender may have far-reaching consequences, such as never daring to negotiate one’s salary, failing to manage one’s income properly or having one’s spouse take care of all things financial.

Jamie points out that, in order to overcome unconscious negative biases, women should be willing to do the “hard” work, that is educating themselves on finance and budgeting, getting involved in the discussion of finance and offering their thoughts and perspective.

Her message to women: “We can make money. We can appreciate money. Money is not scary, scarce or hard. Money can be easy and fun.”

A matter of choice

It sure does take work and consistency to become financially literate and I’m convinced that acquiring this knowledge is extremely important in order to share equal responsibility in a relationship.

As Caroline Bell puts it, “Be financially independent! Never be dependent on someone else for your finances because that means you’re giving up control over your future.”

Discussing money with your partner can come with some friction and it is advisable not to turn a blind eye for the sake of avoiding an argument.

Your financial well-being and stability depend on the choices you make every day, so don’t be afraid to choose wisely, and never neglect the big picture.

 

Would you like to know more about how you can discuss this topic in the relationship? I’d love to hear from you!

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Why child inclusive mediation is important

After participating in a workshop on child inclusive mediation I revisited some of my ideas on direct consultation with children in mediation.

Until now I have preferred to introduce the voice of the child indirectly by means of child focused mediation tools. In my opinion, it is a gentle and at the same time very effective way of drawing the attention of the parents to the wellbeing of their children. In the midst of family conflicts that may include a separation fought out in court, parents do not always manage to focus their attention on the children’s inner world and on how they are experiencing the separation.

Introducing the child’s perspective is always a game changer, in fact, when parents reflect on the child’s point of view, the conversation stops being a debate about couple issues and starts becoming a dialogue about parenting and parental responsibility. The blame game is over and parents can concentrate on how to make things better for the sake of their children.

Various legal instruments applicable in international children cases (such as the Brussels II bis Regulation) recommend or require taking the views of the child into consideration in all matters affecting them, either directly or through an appropriate body.

While child focused mediation is widespread, the direct involvement of children in mediation is less common and controversially debated.

What is the story that the child is telling about parenting?

The child’s perspective is of crucial importance in order for parents to make informed decisions relating to their children. In may bring into the mediation process views that may be missing from parental discussion.

The question is: What information can be obtained from direct consultation with the child which cannot be obtained through child focused mediation?

The aim of child inclusive mediation is to offer children a safe space to express themselves and be heard. While thorough child focused mediation parents get to give their interpretation on how the child is feeling, in child inclusive mediation children describe their views and emotions to the mediator in their own words.

This information is then fed back to the parents, sometimes causing surprise or even shock. This surprise can transform a frozen conflict into a collaborative effort in order to make arrangements that are in the best interest of the child.

Ultimately, hearing children in mediation can be extremely beneficial and generate a deeper understanding and empathy among family members.

The importance of the “helicopter view”

Another question is at what age it is appropriate to directly involve children. Different countries handle this matter differently. In some countries children as young as three years old are heard in mediation.

According to Piaget, the Swiss pedagogue, children under the age of 12 have not yet developed the ability to formulate abstract thoughts, they speak in the moment rather than about hypothetical situations. In short, they lack the ability to see things from a distance (“helicopter view”).

For this reason, among other things, despite having reconsidered the possibility of including children in mediation, I would still opt to hearing children aged 12 or older and would let the youngest ones be heard by professionals with clinical experience (child psychologists).

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Online mediation with an iPhone

Online mediation with an iPhone

Last week I found out that you can actually mediate with an iPhone: I participated in an online mediation simulation with Virtual Mediation Lab and I played the mediator’s role connected with my iPhone.

My experience with online mediation has been surprisingly good so far. The very technology that makes the online experience less “intimate” also enables a conversation that may never have taken place when the parties live on two different continents.

What I miss most in online mediation is mutual and simultaneous eye contact. When you look into the camera you look the other person in the eyes but you can’t see their face. When you look at their face on the screen it looks like you are looking somewhere else.

I’ve been wondering if I should train myself to just look at the camera so that the parties feel “looked at” but I’ve found out that I can’t go without looking at their facial expressions while we talk. It’s so important to spot a smile or a slight mood change when you can’t see how the parties interact in physical space.

Another factor is that depending where you put or how you turn your laptop/smartphone/webcam your position looks different on the screen. So you might happen to appear as looking towards your left while the parties appear on the screen at your right.

On the plus side, however, I think that it’s easier to perceive the mediator as a neutral party in online mediation as we are all “faces in a box on the screen”. A lot of subtle factors that may unconsciously influnce one’s perception like height, shape and the way you dress are just cut out.

Another big plus to me is the ease of switching from joint sessions to individual sessions. Normally I would have to go in another room with one party and leave the other one waiting, which is usually done later in the session when a certain level of trust has been established. In online mediation it is possible to switch at a click and the other party is left to wait in the comfort of her own apartment. I found that this feature speeds up the process as it makes it possible to check in with the parties confidentially and adjust the conversation accordingly.

Unfortunately the iPhone has a very small screen otherwise I could have also tried to see if it’s possible to write a memorandum of understanding at the end of the session with the on-screen keyboard. 
On the other hand the freedom of movement that the iPhone gave me proved very helpful, infact at one point I realized that my dinner was burning and I could just walk into the kitchen and turn off the oven while keeping the iPhone right in front of me without interrupting the conversation.

Well, next time I know: Before entering the (virtual) mediation room it’s important to turn off every single device that could disturb the process!

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