Does Mother Know Best When it Comes to Discussing Finances?Submitted by HearthStone | Private Wealth Management on August 18th, 2015
APRIL 13, 2015
Does Mother Know Best When it Comes to Discussing Finances?
Mothers not only encourage us to eat our vegetables and sit up straight; it turns out they are also more likely than fathers to initiate conversations about financial planning. This is yet another reason to celebrate mothers this month.
These findings stem from a Fidelity Investments study released last year. The data is part of the Intra-Family Generational Finance study that Fidelity Investments conducted across its pool of investors. To qualify for the study, parents had to be at least 55 years of age, have an adult child older than 30, and have investable assets of at least $100,000.1
Why do mothers have a major hand in both rocking the cradle and guiding the discussion toward sensitive, sometimes difficult, topics? One reason is women’s tendencies to play the role of “empathizer-in-chief.” Many mothers find it easier to talk with their adult children than fathers do. Mothers tend to have more detailed conversations with their adult children about delicate financial topics such as estate planning or wills (79% of mothers vs. 69% of fathers), the ability to cover living expenses in retirement (70%, vs. 55% of fathers), and health and elder care (66% vs. 56% of fathers), according to the study.
Sixty-four percent of mothers surveyed say it is “not at all difficult” to start a conversation with their child about savings and investments, vs. 54% of fathers who would say this. Often, fathers believe that encouraging independence among their children and taking a more pragmatic, straightforward approach tend to be more valuable in the long run. The study revealed that more than half the men (54%) see themselves as the “pragmatist” when having financial conversations with their adult children.
Also, more mothers (13%, vs. 3% of fathers) are planning on an adult child caring for them if they become ill. Conversely, more fathers (47%, vs. 32% of mothers) are counting on their spouse to care for them. Adult children should be mindful of these important findings when conversing with their parents.
Additional data indicates that part of the reason women assume a larger role in conversations about financial topics is because women tend to control the bulk of household finances.2 They fuel the economy by making more than 85% of consumer purchases and influencing more than 95% of total goods and service purchases.3 Studies predict that women will control two-thirds of the nation’s wealth by 2020.4
Of course, every family is different. There’s no single way that’s better than another to discuss financial topics. No matter who brings it up, it’s essential that many families learn to communicate better. While a majority of adult children and their parents agree that it’s important to have frank conversations about wills, estate planning, or health care, there is little agreement on when to talk, the study found. At Hearthstone Private Wealth Management, we think the best time to talk is today. Life brings many surprises, and waiting for the perfect time could result in less-than-ideal solutions.
1 The children in the study qualified if they were at least 30 years of age and had money saved in an IRA, 401(k), or other investment account, and must have saved at least $10,000.
2 The Working Mother and Chase®SLATE®“Life of a Working Mother: Career, Family and Finances” survey, 2013.
3 Fabry, Susan, “Women Dominate the Global Market Place; Here Are 5 Keys to Reaching Them,”Fast Company, 2013.
4 “The Female Economy,” Harvard Business Review, Sept. 2009.