A recent study by Ameriprise Financial shows that millennial women are likely to feel stretched financially and are the most likely to have difficulty balancing the need to spend time managing money with other responsibilities. They also tend to be more driven by the present than the future when it comes to financial decisions (48% vs. 37% of Gen Xers and 20% of Boomers).
BlackEnterprise.com sat down with Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial, to talk about the company’s recent women and money research study.
BlackEnterprise.com: What prompted Ameriprise to conduct this study?
Susanna de Baca: We wanted to better understand how women make financial decisions for their household. The goal was to better understand our consumers and provide our advisers with information to better serve our clients.
Did any of the survey results surprise you?
The biggest surprise was that women of all ages are actively involved in their finances. We only saw 4% of the entire survey respondents who were unengaged. That leaves a very large number of women who are sharing in financial decision making or who are primary financial decision makers. We found that 41% of our survey respondents said that they were the primary financial decision makers.
Why do you think more women are becoming the primary financial decision makers?
Of that 41% that population was split pretty evenly between single, married, and widowed individuals. So for some of them, it may be that there was a circumstance that led them to be primary decision makers. For others it may be that they are more knowledgeable, and that responsibility simply falls to them. When we look at it by generation, it seems to be a little bit different, and women’s reactions to that primary decision making role was very different.
Why do you think that boomer women feel more confident about their finances than millennialis?
What was interesting was that when we asked a lot of broad questions about women’s feelings about their life in general, boomer women seemed to be feeling better about a variety of things. They felt more financially confident and felt more at peace with a lot of their other values as well. So it’s mainly that these women are getting to a point in life where they are accepting their situations and feeling a little bit better about them. Generally, as they get older, they’re further along on their financial planning process. One of the questions they answered was that they felt the financial planning they had done was really going to take off, so that could be why.
The study mentioned that generation X more recently had been affected by divorce, unemployment, or a loss of assets. What can they do in advance to protect their assets?
What we know and talk a lot about in financial planning is that the unexpected is likely to occur. While you can’t prevent unexpected things from happening, you can prepare for them in a variety of ways. The first is to have a comprehensive written financial plan looking at a variety of different elements in your life. If you’re proactive and you think about your budget, your savings, insurance, and your retirement plan, and start creating and taking action on that, then if the unexpected did occur, you’ll be better prepared. So for our generation X women, rather than being disengaged and putting their head in the sand, I would recommend creating a plan and thinking of those things in advance, so that if the unexpected happens you won’t find yourself derailed or off track.
Check out Part 1: 4 Money Management Tips for Millennial Women.