There’s a fascinating paradox occurring in our modern culture. While the overall status of women has improved in Western society, today, women report being far less happy than they were in the 1970’s. It’s easy to see why this might be true for SOME women in SOME situations, but in, “The Paradox of Declining Female Happiness”, authors Betsey Stevenson and Justin Wolfers demonstrate that this trend is true for women across all demographics[1]. So, statistically, if you’re in your 30’s or 40’s there’s a good chance your mom WAS happier!
Was Mom Happier Financially too?
While Stevenson and Wolfers measured various areas of happiness, for the purpose of this blog, I want to focus on the declining FINANCIAL happiness of women over the last several decades. Even though, by most economic measures, women are better off today, it appears Mom was financially happier too. According to the previously mentioned article, the two aspects of women’s lives that have seen the biggest drops in satisfaction since the 1970’s are health and finances. I’d be willing to bet those two domains are very closely related. After all, it’s tough to get out of bed early to hit the gym or get out in the sunshine when the bills just keep piling up. As a financial advisor and father of five girls, I care deeply about the well-being of women, particularly when it comes to finance! So, what’s causing women who are economically better off than previous generations to be less happy, particularly when it comes to their money?
Are Women Playing Whack-a-Mole?
There’s been so much social change since the ‘70s, it’s hard to know what’s driving the trend of downward female happiness, but I recently came across a data point that, as a dad of girls, rang incredibly true. An ongoing study of American high school students, called “Monitoring the Future Survey” shows that today’s teenage girls attach greater importance to a greater number of domains in their lives than their predecessors[2]. In other words, young women are focusing on more; much, much more. Women in the Greatest Generation may have had to focus on academics and family while women in the Baby Boomer generation might have had to focus on academics, family, and career. Young women today seem to be trying to prioritize… well, everything! In my opinion, this is a very likely contributor to American women’s declining happiness in general and their financial unhappiness in particular, despite the increase in opportunities available to them today. If everything is valuable, you’ll never be able to succeed enough to be happy with the outcome.
So, if a culture that declares “you can do it all” is a contributor to the declining happiness of women (and I believe it is) what can women, and those that care about them, do to create greater financial satisfaction? The following are a few tips based on my experience as a financial advisor, husband, and girl dad:
- You only have 100%, so pursue what interests you, let go of what doesn’t
- Clearly define your goals
- Hire a pro who listens
You only have 100%
As much as high school football coaches like to encourage 110%, we all know that’s not actually a thing. 100% is all you have. Everything you pursue is going to require some percentage of you. If you’re pursuing everything, nothing is getting done well. That feels awful and will absolutely lead to dissatisfaction. Letting go of the things you don’t really care about allows you to dedicate a greater percentage of yourself to what you DO care about.
The things women care about vary greatly from woman to woman and even more so from women to men. Our culture seems to be pressuring women to care about all the things that women care about, and the things that men have traditionally cared about too. I’ve blogged extensively about the fact that, when it comes to finance, men and women care about different things. If women are allowing themselves to be pressured into caring about the things men care about financially, they are going to be less happy with their finances.
Clearly define your goal
If I was born in the exact same family, in the exact same region 100 years ago, I would have had far less choices in my life. I likely would have pursued the same trade my father and grandfather pursued instead of getting to pursue a career in both aviation and finance before the age of 40. Today we have options, so many options! That can be a tremendous blessing, but it can also be a burden.
In my opinion, the group of people that have experienced the biggest increase in personal choices since the 1970’s is women, and I don’t know that our culture is empowering them to confidently say, “no”. In fact, the culture seems to be impressing upon women that, if they aren’t elite students, amazing athletes, industrious workers, rich, fit, beautiful, and raising chickens they’re falling short. I believe that this constant pressure to achieve is at the heart of declining happiness among women. Don’t let the culture, or anyone, tell you what success (financial or otherwise) looks like!
In a world with endless choices saying “no” is an incredibly valuable skillset. Like I said before, you only have 100%. With so many seemingly good options vying for time and attention, how can you know what deserves your incredibly valuable “yes”? I suggest that you craft a mission statement. I know that sounds a little strange, you’re not a corporation after all, but a well-crafted mission statement can help you clearly define your goals (or you and your spouse’s if you’re married). This statement becomes a metric by which you measure all of the endless choices you have. The things that you choose to say “yes” to should align with your predefined mission. Anything that doesn’t is an easy “no”; even if it SOUNDS like a really good idea. Your mission statement will help you focus on what’s BEST in a world of far too many GOOD choices. (You can find a helpful guide for creating a personal mission statement at: https://www.ramseysolutions.com/personal-growth/mission-statement-101)
A recent survey by cardrates.com sought to understand finances and contentment in the U.S. One of the many interesting observations from the survey was that women felt content and financially secure at lower levels of net worth relative to men[3]. This is important because our culture tends to measure financial success by having more. That leads us to assume that contentment would require more. For those whose mission includes having lots and lots of money, that would be a fine pursuit, but for many women “more” may not align with their mission statement.
Am I advising women, to save less? Not at all! I’m pointing out that we all have different preferences and priorities, and gender plays a significant role. I’m advising women, and those that care about them, to embrace those differences and make sure they’re allowing themselves to be honest about what’s important and more importantly, what’s not important so that the right priorities are being pursued. I cannot overstate the value of continually working to align your resources with your personal values!
Hire a Pro who Listens
No one is good at everything. We tend to be best at the things we’re interested in. So, in the vein of only having so much of yourself to give to your pursuits, if finance isn’t something you’re interested in, there’s no reason to pursue it by yourself. Hire someone who listens to you, then let him/her do their job.
I recently had a patio built. I had a talented designer draw it up and an equally talented contractor turn it into reality. All I did was tell them what my wife and I wanted and wrote the checks. I didn’t worry about how deep the footings needed to be, or where the trusses needed to go. That’s why I hired professionals! Yet, I can’t tell you how often a new client will tell me that they wish they understood investments better. Investors would be much better served if they spent their time clearly conveying what they would like and not like from their investing experience and let the pro worry about the details.
In the same way the professionals I hired took my ideas and turned them into a patio, a good financial advisor will listen and help you reach your financial goals without you needing to get bogged down in the details. Leaving you more of yourself to give to things you actually care about.
Final Thoughts
Even though women are financially better off than they were in the ‘70s, they are much less satisfied with their finances. One significant contributor to this is just how much women are expected to juggle these days. What good is having more if you don’t have the time to enjoy it?! It’s important for all of us, especially women, to be able to focus on the things that are meaningful to us. If finance isn’t your cup-of-tea, you’re normal (whether male or female) and a financial professional will add even more value, so don’t be afraid to partner with a pro and tell them every nuance of your financial picture. If he or she’s worth their salt, they’ll love the opportunity to dig into those details for you.
Finally, don’t let the noise drown out your voice. Finance is deeply personal. It reflects our individual values so make sure your financial plan reflects whatever it is that’s most important to you: Time with friends and family, simplicity, travel to exotic places, or whatever! Women have greater access to economic resources than ever before. What’s left for women to enjoy their hard-won economic benefits is to align their resources (in collaboration with their husband) with what really matters to them, not their friends, not their parents, and not the culture. This alignment isn’t easy to achieve, but focused, honest communication (particularly with a professional) can be a powerful means for finding more satisfaction with your financial pursuits.
[1] Stevenson, B. & Wolfers, J. (2009). Paradox of declining female happiness. Working Paper 14969 http://www.nber.org/papers/w14969
[2] https://monitoringthefuture.org/wp-content/uploads/2023/12/mtf2023.pdf
[3] Donald, J. (2024). Salaries, net W\worth & C\contentment: Survey R\reveals the M\magic N\number for perceived financial happiness. Retrieved on November 1, 2024 from https://www.cardrates.com/studies/salary-net-worth-contentment/