7 Habits of Money Smart Women

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7 HABITS OF

MONEY SMART WOMEN By Amabella Jimenez-Bulos

AbstractWomen hold the key to many financial decisions. They are more likely to manage

household finances, make most of the choices about purchases, and even decide oninvestments.” Yet, according to various statistics, they are at the losing end in the

financial equation.

This article appeared originally in theNovember-December 2008 issue of MoneySense.



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7 Habits of Money Smart WomenThere are unique financial challenges faced by women, but thesavvy ones have develop ways to take control and build a bright

future for themselves and their family

By Amabella Jimenez-Bulos

omen hold the key to many financial decisions. They are more likely to manage household

finances, make most of the choices about purchases, and even decide on investments.” Yet,

according to various statistics, they are at the losing end in the financial equation.

Women live longer than men by an average of seven years and need 20% more for retirement. They

earn on average 25% less than men. They save less than men do for retirement since they take off from

work for around 11 more years than men, to raise children or look after aging parents.Aneth Lim, consumer education head of leading multinational bank, says “Today, most women face the

twin challenge of developing their careers and raising their families.” She adds, “As a mother, you

need to make sure that all bills are paid and that there is always enough cash to tide you over should

an emergency arise. As a working woman, you have to look out for your and your family’s financial

future – saving up to provide for your children’s education and ensure a comfortable retirement for you

and your spouse.”

Single women face their own challenges.

Businesswoman Angeli Pangilinan-

Valenciano, notes, “I think the landscape

today of the single woman has a tougher

terrain. Women are marrying at a mucholder age and careers take precedence

over marriage.” With no dependents, they

can be susceptible to “false advertising,

juicy sales offers, and marketing tactics”

as “the market has clogged us with so

many choices.” She adds, “With no

children to support, single women end up

with so many things they don’t need,

bought out of credit card minimum balance

systems, and they end up working to pay their credit cards!”

Josephine Banogon, finance head and comptroller of Pilar Development Corporation and a graduate of

the Registered Financial Planner program, thinks the other extreme is the single young Filipino careerwoman or overseas worker burdened with “parents and other kin who are depending on them for

support and as a result there’s nothing left as savings for their future needs.”

Angeli says that many such women are expected to pay for their parents’ expenses when they retire

without savings. “Sadly this is a normal situation now in the Philippines because as a country we were

not taught how to save nor invest by our government. They are expected to help educate their siblings,

sometimes foregoing their own education.”

W

WOMEN LIVE LONGER THAN MEN BY ANAVERAGE OF SEVEN YEARS AND NEED

20% MORE FOR RETIREMENT. THEY

EARN ON AVERAGE 25% LESS THAN MEN.



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There are unique difficulties for single parents are also. Josephine says “they are left to single-

handedly raise the needs of their children. To this effect, they soon find themselves without any money

left for them to save for their future needs.”

How do women, single or married, handle these financial challenges? And beyond mere survival, how

can they prosper financially? There are many stories of women who have earned a reputation of beingskilled at handling money, able to manage their household budget well, and make savvy financial

decisions that have led them and their family to a bright future. These are what we call money smart

women.

Some of them are innately good at finances but many have to learn the hard way, by force of

circumstance. Either way, they have certain habits that helped them to take control of money and

achieve financial prosperity. Here are the seven habits of money smart women:

Habit#1: They take charge of the household budget

Women have traditionally been the keepers of the family purse. A 2008 Pew Research Center survey of

couples in the US showed that by a ratio of nearly two-to-one, women say that they (45%) rather than

their partner (23%) manage the money in the household.

There are several possible reasons for this. Aneth says, “I suspect it’s because women are better at

sweating the details. We can see the forest and the trees. We know how much we need to settle all the

family’s obligations, and make sure that they are met.”

Josephine believes it’s because “women normally are the home managers, and are more diligent and

prudent in handling money.”

And that’s usually because “they are not risk-

takers in terms of investments,” explains Chona

Jacinto, senior vice president for marketing atAccette Insurance Brokers. She adds, “Most

married working women focus on their family

needs rather than spending night-outs with

friends.”

In the Philippines, that ratio revealed in the Pew

Research study would likely be even higher.

Angeli, who manages the career of a number of

celebrities including her husband, Gary, thinks

this is largely cultural. For one, “In the past, the

man was the breadwinner, working very hard

while the woman stayed home to take care of the children, so the man naturally turned over his

paycheck to his wife to manage.” Further, “The Philippines is also very much a matriarchal society.

The mother traditionally runs the household so she runs the budget of the home.”

But while it’s largely true that women rule household finances, that doesn’t mean they all do a

fantastic job. The Australia-based Financial Literacy Foundation released its “Financial Literacy –

Women Understanding Money” report in 2008, which showed that “although women are generally

confident in their ability to manage money, some do not have good management habits, both for issues

where confidence in ability is high, such as budgeting, saving, and dealing with credit cards, and for

issues where confidence in ability is relatively low, such as investing.”

“WOMEN ARE BETTER AT SWEATING THE

DETAILS. WE CAN SEE THE FOREST AND

THE TREES. WE KNOW HOW MUCH WE

NEED TO SETTLE ALL THE FAMILY’S

OBLIGATIONS, AND MAKE SURE THAT

THEY ARE MET.”

Aneth Lim



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For instance, around half of the respondents said that they don’t regularly budget for day-to-day

expenses, and around a fifth reported that they are not easily able to keep track of everyday spending

or do not think about ways to reduce their spending.”

Money-smart women not only take the cudgels of the household budget but also are disciplined when it

comes to budgeting and savvy in terms of cutting costs.

Habit#2: They maintain their own financial independence

Many married women make the mistake of being dependent on their husband for their financial

security. For one, women are more likely not to join the labor force, temporarily stop working due to a

pregnancy or take care of young children, or permanently quit work to focus on managing the

household. Many such women don’t have bank accounts, credit cards, and brokerage accounts under

their names. They are in danger of losing their financial identity, which can be very detrimental if they

end up separated or widowed.

Various US statistics offer staggering

conclusions: almost one in four women is

broke within two months of a husband

passing away; over 75% of all women are

eventually widowed at an average age of

56; 53% of women are not covered by a

pension compared to only 22% of men; and

87% of the poverty-stricken elderly are

women.

True, dual-income households are

becoming the norm in many countries

these days given the economic reality.MasterCard International’s “MasterIndex of

Women’s Advancement” 2008 survey

showed that the female labor participation

rate in the Philippines has been steadily

growing, from 56.55% in 2005 to 59.53% in

2008. The Philippines also has the highest index score of 86.82 across 13 Asia Pacific markets, meaning

women in the Philippines are fast closing the gap in achieving parity with men in the areas of labor

force participation, tertiary education, managerial positions, and above median income.

But this doesn’t always translate to financial security for women on a personal level. Liz Perle was a

high-powered publisher at Prentice Hall, Addison Wesley, and William Morrow/Avon. In her book

“Money, a Memoir,” she confessed that despite her business acumen, “I had drunk the cultural Kool-Aid

that told me that having a husband meant social and fiscal security and that I wouldn’t have to deal

with my own financial well-being.”

In an article entitled “Men, Women and Money” that appeared on Psychology Today, the writers Olivia

Millan and Karina Piskaldo observed that “Women are raised to believe they won’t be good at [money]

and, if they're lucky, some man will take care of the details of money and investing.” They added,

“Their biggest challenge in relationships is not losing themselves; it’s holding on to their own sense of

self.”

ALMOST ONE IN FOUR WOMEN IS BROKE

WITHIN TWO MONTHS OF A HUSBAND

PASSING AWAY; OVER 75% OF ALL

WOMEN ARE EVENTUALLY WIDOWED AT

AN AVERAGE AGE OF 56; 53% OF

WOMEN ARE NOT COVERED BY A PENSION

COMPARED TO ONLY 22% OF MEN; AND

87% OF THE POVERTY-STRICKEN

ELDERLY ARE WOMEN.



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Aneth warns such women to “not leave all the financial decisions to your spouse. It is important that

you can stand on your own two feet financially.” She adds, “If you are working, consider having your

own checking and/or savings account, your personal credit card, [your own] insurance, and personal

investments. If you are not working, talk to your husband about how you can enjoy financial

independence – maybe he’ll give you a monthly budget and you can manage it as you see fit.”

Even if you choose not to work full-time, there are still other ways to earn extra income to maintain a

certain level of financial independence. Angeli says “a laptop, having the right software installed, a

cell phone, and a good broadband or Wi-Fi connection can solve that problem.” She explains that there

are many jobs you can do from home, such as editing, writing, Web or graphic design, audit, and

consulting.

Josephine even proposes that couples who

decided to let the wife stay at home full time

should allocate from the household budget an

amount for her salary for managing the home.

“She will have an income which she can use to

save for her present and future personal needs,”

she explains.

The other issue is the tendency of women to put

everyone else’s financial well-being ahead of

them, given their nurturing instincts. Suze

Orman, in her book “Women and Money,”

explains “Your inner nurturer reigns supreme;

you do for everyone before you do for yourself.”

As such, women save money for their children, aging parents, and other family members. The Financial

Literacy Foundation noted that “women are less likely to have personally thought about long-term

financial plans for the future and for retirement.”

Suze emphasized that “By taking care of yourself financially, you will truly be able to take care of

those you love. Becoming powerful in a lasting, beneficial way is never done at the expense of others;

it is done for the good of all.”

But it’s not just married women. Singles can just as be neglectful of their own financial security,

especially in cultures where they are expected to provide financial support to their parents and

younger siblings. Angeli says that “sometimes you want to be the Mother of Mercy to everyone to a

fault! Sometimes, you do not have the finances, but you end up trying to help when you have other

obligations to settle that are commitments you must first pay.”

To be money smart, whether married or single, you need to accept that you really need to watch out

for your own good, because that will allow you to help others. As Josie says, “As a single woman, I’m

responsible for myself even though I know my family’s around me. To be financially independent is very

liberating.”

Habit#3: They work with their significant other as a team

A new study by Allianz Life Insurance Company of North America Finances confirmed the conventional

wisdom that finances are often the cause of marital conflict: “Money is 20 times more likely to trigger

arguments in a marriage than sex, particularly the fear among couples that they are not saving enough

money or that they are in too much debt. Women are more likely to attribute arguments about money

to issues of power and control, while men are more likely to attribute it to trust.”

BY TAKING CARE OF YOURSELF

FINANCIALLY, YOU WILL TRULY BE ABLE

TO TAKE CARE OF THOSE YOU LOVE.

Suze Orman



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The Psychology Today article noted: “Many individuals have a troubled relationship with money. Then,

when they get into a couple relationship, money matters get explosive. Other people may have no

problem with money individually; the trouble starts after they’re in the relationship.” That’s because

they come from different – often polarizing – money backgrounds, perspectives, and personalities. And

they rarely, if ever, talk about these differences.

That’s why Angeli explains “an open communication line with your husband [or wife] through regular

talks is wise. You must discuss financial issues so both of you are aware of financial responsibilities and

commitments.” Aneth concurs, “It’s recommended that you schedule money talks with one another,

regardless of whether you are both working or only one is. During these talks, you can discuss a whole

range of things – how you are managing currently, savings for your future, and your financial

aspirations.

Psychology Today concluded, “Spouses who start

talking genuinely about what they like about

each other’s money style create an atmosphere

of safety and non-defensiveness. Once such a

way of talking about money is established and

once couples understand the positive intent of

the partner, they can then work out a solution to

almost any problem, a solution that best fits

their own unique needs.”

Angeli says, “A husband and a wife must also

mutually agree on what to purchase when

disposable income increases. Although some

women may disagree with me, I believe that the

husband, if responsible, must have the last say, as a woman must submit to the husband’s decisions

(that’s what the Bible says!). This practice eliminates strife.”

In her case, she and Gary also practice tithing for over 20 years, and she says that God’s promises of

prosperous finances, health, and family life as a result of tithing have been proven real in their lives.

“Gary and I apply the tithes and love offerings principle. We give 30% of our personal income to the

Shining Light Foundation that manages the donations to churches, support for less privileged diabetics,

ministries, and some scholars. Giving is a must! If we have more, it only means we were given the

responsibility of helping others in their lack,” she shares. “So a balance of faith and practicality will

lead you to a more secure future,” she concludes.

Habit#4: They have a healthy relationship with money

The idea of having a health relationship with money sounds foreign, but Suze believes it is the key,

especially for women, in gaining control of it. One extreme is not having a relationship with money at

all, ignoring its power, and on the other end is having an abusive relationship, misusing money to

substitute for something deeper. For women, that often is manifested by a compulsive shopping

addiction.

A BALANCE OF FAITH AND PRACTICALITY

WILL LEAD YOU TO A MORE SECURE

FUTURE

Angeli Pangilinan-Valenciano



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Josie explains however that it is normal for women in general to love shopping: “I for one love shopping

with friends and sister. This is a form of bonding for us. The addiction comes when a person substitutes

shopping for something else like love of a partner, family relationships, etc.”

A Yahoo article noted that “previous studies have shown that between 2% and 10% of adults have some

compulsive shopping tendencies, with women nine times more likely to be affected than men. One

study found that up to half of all 14 to 18-year-old girls in Scotland, Italy, and Spain displayed signs of

shopping addiction.”

Chona thinks that non-working married women who are spoiled by their husbands will tend to spend

more “since she has no value for money. However, for working women, shopping will only become an

addiction if she is still single; otherwise married working moms would rather buy stuff for their kids

first.” There have been cases though of compulsive shopping for one’s children.

Josie says that items on sale often drive people to buy, even if it’s unnecessary. “When this kind of

situation [is repeated], then it becomes a habit which lead eventually to addiction to shopping,” she

adds. Angeli also blames the lure of name-brands. “Unless you can afford it, don’t attempt to buy

name brands. There are tons of great buys from tiangges and sales that will serve the same purpose,”

she notes.

Angeli also believes that because of credit cards that offer 0% interest deals, “people get ensnared bystores’ offers to sell products,” clarifying that “installment is acceptable if you do have the capacity to

pay monthly given other budget items that fit into the monthly average expenses you may have.” She

also warns that some women may be deceived in just paying the minimum required balance: “It is a

trap that has destroyed many lives. You end up living beyond your means and instead of living within

your monthly paycheck, you purchase groceries, etc. with a credit card and rack up your bills to

unhealthy levels.”

Habit#5: They take more investment risks

A new study by Allianz Life Insurance Company ofNorth America revealed that, when it comes to

investing, men are three times more likely than

women to take risks. The Financial Literacy

Foundation report concluded that “compared to

[everyday money management issues like] budgeting

and saving…women are less confident than men

when it comes to investing, and are less likely to

take factors such as risk and return into

consideration when making an investment

decision.” The US-based Financial Services Authority

observed that women are more cautious, more

careful, and more traditional than men when itcomes to investments.

For one thing, it’s in their nature to more cautious. Angeli says, “We are naturally safe creatures who

are not as experimental or adventurous as the businessmen around us. Men are more of risk-takers.

Women like low-risk investments.” Chona thinks being more conservative is not necessarily a bad thing:

“It is good in a sense since it balances the supposedly aggressive nature of men.”

It could also because, as the nurturers in the family who look after everyone else first, women want to

make sure their investments are safe. Aneth shares, “I read somewhere that this is because men want

WHEN IT COMES TO INVESTING, MEN ARE

THREE TIMES MORE LIKELY THAN WOMEN

TO TAKE RISKS.

Allianz



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to get rich, while women want to send their kids to college. Once they bought into a stock or an

investment, women hesitate to get in and out to save on transaction fees and capital gains taxes.”

Besides, Filipinos are conservative investors in general, preferring safer vehicles like time deposits –

women even more so. Angeli observes, “Women like to see and touch their investments. Filipinos have

also not been as exposed to working on investment portfolios which consist of a package of real estate,

stocks, mutual funds, bonds, and insurance products.” She shares, “I personally would rather see a

condominium we have purchased than invest in pre-selling projects especially with the boom in

construction of such projects now. I personally feel that investing in a company whose management

team I do not know is risky.”

The global financial crisis certainly is not making paper assets like stocks, bonds, and mutual funds look

good. Angeli says, “Today with the market crashes, things seem scary and the traditional savings

opportunities like real estate, gold and jewelry, paintings, and collecting antiques are starting to

become the safer options again.” However, some see falling prices in the capital markets as a buying

opportunity. Angeli for one is considering other viable investment options.

Aneth clarifies that actually, “being conservative is neither good nor bad. If you are nearing your

retirement age, then it’s good because you may need your funds sooner and can’t afford to wait out

market volatility. If you are young though, you could be losing out on a lot of earning opportunities if

your money is just in a savings account or time deposit.”

She for one doesn’t consider herself a

conservative investor: “I tend to shift between

being moderate and aggressive. I am not

investing to fund a trip around the world or a

vacation home. I am in it for the long haul, so I

can afford to take more risks because of my

longer investment horizon.”

Money smart women know when to be

conservative and when to take a little more risk.

In fact, women tend to be better investors than

men, according to a recent study by the

National Association of Investment Clubs in the

US, which found that women’s investment clubs

outperformed their male counterparts by a wide margin in 9 out of 12 years. Digital Look, a financial

research Web site, surveyed and analyzed 100,000 portfolios, and discovered that ordinary women

investors are consistently doing better than well-salaried professionals, with the average woman’s

portfolio rising by 10%, compared to just a 6% increase for the average man’s portf olio.

Thankfully, more and more women are learning to like investing. Josie shares, “I’ve always found

investing interesting. For me, this is like playing Monopoly when I was young. Buy low, sell high. I’m

always trying to be one step ahead of the market.”

Habit#6: They educate themselves financially

A major barrier for women when it comes to being confident about their financial abilities, aside from

lack of time, is lack of knowledge. Prudential’s fifth biennial study “Financial Experience and Behaviors

Among Women” showed that about half of the women surveyed are unfamiliar with basic financial

products. “Even mutual funds…are not well understood.”

I’VE ALWAYS FOUND INVESTING

INTERESTING. FOR ME, THIS IS LIKE

PLAYING MONOPOLY WHEN I WAS

YOUNG.

Josie Banogon



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In addition, the reported noted, “Significant numbers of women hold attitudes and beliefs that can get

in the way of them managing their money better – from thinking it doesn’t matter to finding it

stressful, uncomfortable, or boring.”

A report called “Women, Money and Power,” commissioned by global insurance and financial services

giant Allianz, revealed that women feel overwhelmed by materials and language: “Difficulty inunderstanding financial information is a critical barrier for many women.” When asked about their

financial planning concerns, 44% of the women respondents said that information is overwhelming, 36%

replied that information is complicated or hard to understand, and 32% found materials are really

boring and dry.

Josephine thinks it’s not accurate to zero in on women: “I do not believe that only women find

investing boring. This is true for everybody, men and women, who do not know how to outpace

inflation.”

Aneth also sees a growing shift in women’s attitudes. “As our income grows, so do our interest in

investments. Hard earned money deserves more than guesswork when we choose our investments,” she

says. “When we host talks on market outlook and other financial seminars, I see a lot of women in the

room and they are not afraid to ask questions. They are comfortable making investment decisions, notonly for themselves but also for their spouse,” she observes.

Investing in yourself through education and in building up your own career is very important, Angeli

says. “For example when Gary started, he started investing in equipment which allowed him to

produce musical albums that he earns from even if he is asleep.” She advises, “Invest in your career

not in flashy cars or the latest plasma TV. It also pays to educate yourself on what your bank accounts

are, what your land titles are, what loans you have, what financial commitments you have so that you

do not end up broke simply because of ignorance.”

Habit#7: They seek help from experts

The Allianz report found that for women, while the

Internet is usually the first thing they turn to for

information, it ranked very low in effectiveness.

Human contact remains “the most meaningful and

effective” source of information, with some 50% of

respondents preferring a person explaining

financial information rather than reading about it.

Family members, financial advisors, banks, friends,

and seminars ranked much higher.

Prudential’s study also confirmed this. In their

survey, more than six in 10 women prefer learningabout financial products through friends and

family: “For all generations, relying on a trusted

network is important, as friends, family, and

advisors top the list as a number one place to go for learning about financial and insurance products.”

In addition, they tend to remain loyal with a financial provider with whom they have an existing

relationship. “They prefer to buy financial products face to face, feeling happy to take the

recommendation of a financial adviser, whereas men are better at shopping around,” the report said.

THEY PREFER TO BUY FINANCIAL

PRODUCTS FACE TO FACE, FEELING

HAPPY TO TAKE THE RECOMMENDATION

OF A FINANCIAL ADVISER, WHEREAS MEN

ARE BETTER AT SHOPPING AROUND

Prudentia



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It also added that regardless of age and status, “women are much less likely than men to read the

financial pages of the newspapers. Overall more than one in three men regularly read the financial

pages compared to only one in five women.”

Financial institutions and information providers should take note. Angeli even has some intriguing

suggestions: “Seminars that are attractively packaged would be great to have. Or e-mail blasts to

inform women on simple investment and accounting principles. In the 70s, there were Tupperware

parties where the products were sold while having coffee and a snack. I think that small-group parties

organized to teach about making wise investments would be ideal.”

Aneth says, “If you are single and earning, the best time to start planning your financial future is now.

Talk to a financial expert or financial planner about your money goals and how you can make these

happen. You need to have a financial roadmap where you will map out the quickest way to get from

Point A (where you are) to Point B (where you want to be).”



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To learn more about women and investing, attend the 6th MoneySummit & Wealth Expo this July 12-13, 2013 at SMX ConventionCenter. There will be a special panel discussion entitled“Women & Investing”. Learn more at www.money-summit.com.

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7 Habits of Money Smart Women