Whether the differences are inherent in our biology or socialized, there is strong evidence that men and women handle stress differently. This reality often transfers to the way men and women handle financial hardship.
“Understanding these differences as a couple is foremost as you navigate financial difficulties,” says Jill Williams, CFP, a financial planner with MetLife Premier Client Group. “I’m not an expert at psychology or socialization, but I am in the trenches every day, face to face with clients, and I see how couples respond to financial problems.”
Generational differences in handling financial hardship
Williams doesn’t just see differences in the way members of different genders handle financial hardship. She also recognizes variety in the way money problems are faced across generational lines.
First of all, Williams points out that younger Baby Boomers and older members of Generation X are likely to face challenges such as losing jobs in the middle of their careers, or toward the end of their careers. They run into medical conditions, and their problems take place while they are trying to plan for retirement. This changes the interactions between men and women.
“This older generation of men has typically been socialized to be more comfortable with risk and in their abilities to overcome the hardship,” says Williams. She says that many men in this age range are willing to make riskier investments or experiment a little more because they feel confident that they can turn the situation around. “Women seem more socialized to say ‘I need to save rather than invest,’” Williams points out.
A recent survey from Fidelity indicates that this might be the case. Fidelity’s research indicates that women are less confident about making money decisions, especially when it comes to investing. As a result, they might be more inclined to follow a path perceived as less risky — and be unable to do enough to overcome the financial hardship.
However, this isn’t necessarily the case for younger couples. Williams sees changes in approaches to financial hardship among Millennials. “The financial meltdown impacted Millennials when they were forming their money attitudes,” she points out. “They saw their parents struggling and are, in general, more risk averse — even the men.”
Once again, Williams’ observations seem to be borne out by some of the research. Last year, a study from the Brookings Institution indicated that Millennials are more likely to put their faith in cash than other age groups. This risk aversion among Millennials could lead younger men and women to handle financial hardship similarly, without looking for that balance that a little more risk could bring when it comes to moving forward.
However, Williams does take heart in the idea that younger women are starting to be encouraged to take a more active role in family finances, and that they are showing an increased interest in investing. “Young adult women, thanks to better education, are gaining more confidence about money and investing,” she says. “Millennials are still risk averse in general, but the gap in risk aversion between men and women seems to be narrowing, at least from what I’ve seen.”
How to manage financial hardship in your relationship
Money troubles are going to affect your relationship, no matter what. As a result, it’s important to be ready to work with your partner when hardship comes into play. “Communication is always the answer,” says Williams. “It’s a hot topic when it comes to money and relationships, and a time of financial hardship is when you need to be open with each other.”
One of the best things you can do is to sit down and plan ahead. In some cases, this can be difficult, since women are more inclined to plan ahead than men are. “Men don’t often feel as financially vulnerable as women, while women like to look ahead and ask for help,” Williams says.
Make it a regular habit to sit down and look at your financial situation. These “money dates” can keep you connected to each other and to your finances. Knowing that you have regular times to discuss money can also diffuse situations, since you aren’t always just talking about money when you are in crisis mode.
Review your shared goals as a couple so that you can tackle the financial hardship in terms of unity. Creating an action plan together can help you feel closer to each other, and help you feel as though you are working toward success.
It can also help to get help from a third-party professional. “Be willing to get guidance and work with an advisor,” says Williams. “A financial planner can help act as a mediator and ask questions you might not think about or want to address.”
Williams suggests working with a fee-only planner who can provide you with professional help in creating a plan and helping you overcome hardship. “Even if you don’t have much money you can get help,” she says. “The Financial Planning Association has a pro bono committee that they make available to those in hardship.” An outsider who can help you manage your emotions and your discussion, and keep you on task, can be valuable as you work through your money problems.