The Millennial Financial Decision Gap

Mar 30, 2022

Married millennial women are the least likely generation to engage equally in investment decision-making with their partners.

I had to read that twice.

A study conducted by UBS that surveyed 1,500 people across three generations (including millennials, Gen X, and boomers) discovered the following surprising statistics. 

  • 88% of millennial women intend to share equally in long-term decision-making with their spouse prior to marriage
  • 15% of millennial women actually share equally in long-term decision-making with their spouse after marriage

Why the girl-power intentions but 1950s-housewife follow through? Put simply, married millennial women assume that our husbands know more than us when it comes to finance and investments. When making “bigger” financial decisions, we’re more likely to defer. 

Sallie Krawcheck, OG financial feminist and founder of Ellevest, weighed in on the study in the New York Times. “Younger women haven’t had as many hard-won lessons,” she said.

In other words, millennial women are passing up involvement in family finances because they haven’t gotten financially f*cked in life events yet, like contentious divorces. 

Your husband might be financially savvy, but he’s no Warren Buffet.

On average, American men are more financially literate than women. According to an annual survey conducted by TIAA Institute called the P-Fin Index (Personal Finance Index), men score higher than women across races. 

The greatest gender divide is among white men and women, with white males answering 60% of questions correctly, and women answering only 50% of questions correctly. Further, the functional areas with the biggest difference between men’s and women’s scores are saving and investing – two of the biggest factors impacting long-term family finances. 

Interestingly, confidence of the survey-taker may play a role in score gaps. The surveys are multiple choice and include an option for “I don’t know.” Women selected “I don’t know” for 25% of their answers, whereas men selected it only 20% of the time. In essence, it was noted that men taking the survey were more willing to shoot their shot and be wrong, rather than indicate when they didn’t know the answer. 

Would you trust your family’s financial future to someone who scores a 60% on a financial literacy test? Considering you’re about 300 words deep into a personal finance blog post, I doubt it.

Long-term vs. Short-term Financial Decisions

Okay, so what even is a long-term financial decision? Let’s differentiate.

Short-term financial decisions include establishing a household budget, paying bills, or managing your family’s checking accounts. They’re the high-volume, micro decisions we make every day. Think of these as financial defense for your family, since “prudent” decisions are often focused on frugality.

Long-term financial decisions, on the flip side, focus more on offense – growing your family’s assets or income. In this category, I’d bucket decisions like deciding to invest in the stock market or purchasing an investment property. These decisions feel bigger and are less frequent in nature, but they’re absolutely make or break when it comes to changing the trajectory of your family’s financial wellbeing.

The long-term, offensive financial decisions are the type that women need to be more engaged in making. With a little bit of research (less than you’d think!) and some confidence, you’re ready.

This one’s for the boys.

Let’s give credit where credit is due. This post isn’t meant to disparage anyone’s husband for taking the reins. Most of our husbands are filling a void where they perceived one, and they’re giving it hell. It’s up to us to insert ourselves into the equation.

The same UBS study found that although the financial decision gap was widest in millennial couples, millennial males lead the pack when it comes to wanting to get their spouse more involved. 94% of millennial men who lead financial decisions would like to share more equally with their spouse.

The invitation, opportunity, and reward for your family are all there. It’s time to get involved.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult with your financial advisor.


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