Considering that many marriages have ended in divorce over money problems, it is critical that couples agree on how they should organise their finances.
A good strategy may be to assign a “chief financial officer” of the house, someone who will stay on top of money-related issues, from setting the household budget, balancing the cheque books to investing the family’s nest egg.
Traditional stereotypes would argue that the role is better suited to men, while women are excellent in taking charge of domestic duties. Whoever is more financially competent, more women are now wearing the pantsuit in a relationship, as they take the lead in bigger financial decisions for the family.
According to a survey released in September by Lloyds TSB in the UK, women in younger households aged under 45 are taking charge of the majority of choices of financial provider, long-term planning activity, as well as continuing to handle most of the everyday financial management such as bill payments.
“The balance of financial power has already tipped over to women, creating a new generation of ‘money mummies’,” the report says.
There seems to be a link between female control of household financial planning and real-life dividends. Nine out of ten (91 per cent) of households, where women handle long-term financial planning, have some savings set aside.
In households where the man assumes the lead decision maker role, only four in five (82 per cent) manage to save. In households where neither of the wife or husband plans, about half (56 per cent) have savings.
Experts are split whether the same trend is mirrored in the UAE, however, financial firms such as Killik & Co. recognise that women are indeed taking control of finances more these days, so they have developed an offering particularly aimed at the female market. Through its programme called “Exclusively Female”, the company offers to assist women in all areas of finance, whether they are looking to save money for their children’s school fees or wondering what to do with a divorce settlement.
Natalie Storey, who works as an executive consultant at Acuma Independent Financial Advice in Dubai, often finds herself paying the utility bills, writing the cheque each month for their credit card dues and telling her partner off for not sticking to the budget she made.
“The old tradition of the men taking control of all the finances is something that is becoming a thing of the past,” she says.
“In the UAE, there are a lot of families where the woman is a full-time mum while the man goes out to work. Therefore, it can make more sense for the women to have control over the finances because they are most likely going to have more time to dedicate to this,” she adds.
Sarah Lord, managing director at Killik Chartered Financial Planners, says most financial decisions in the UAE household are still made by men, but women have demonstrated their capability to handle money better.
“Women are, in my opinion, better at multi-tasking and therefore can balance work, child care and financial management better than men,” she says.
“However, also importantly, there had been various pieces of research which illustrate that when it comes to money, women typically want to plan more and think of the short, medium and long-term goals for money, whereas men will typically operate in the here and now with less focus on how they need to plan their finances for future events.”
Education spending is a good example. Women often assume the role of planning for the cost of educating the children and ensuring they have a strategy in place as to how they are going to meet the expenses over the years before sending the child to school.
“Men quite often don’t have such a planned approach and work on the basis that they will pay for the education out of monthly income or annual bonuses which over the years can end up costing them more than if they had a clear strategy in place to pay for school fees and making use of returns that can be received in the investment markets over the years.”
Other experts say there are also indications that women tend to be more “risk averse” and “cautious with financial decisions and investing or gambling.” They may take a longer term “safe” approach which would make them better at planning for family finances,” according to Dr Annie Crookes, a psychology lecturer at Heriot- Watt University in Dubai.
“In addition, mothers may have a greater motivation to consider the long-term protection of the children and as such look for safer investments that will ensure the children will be able to grow, be educated and become successful adults,” she adds.
Although some studies have indicated that they tend to overspend on individual items such as clothes and luxury goods during shopping trips, Crookes says, women are less likely to commit mistakes in investments.
“Another potential factor is that women tend to have less bravado and confidence in their abilities compared with men. They are more likely therefore to follow advice and research thoroughly before making a decision. They may see the investments less as a competition to make excess money and more as a [means for] saving and safeguarding current finances.”
