Amplify: Why financial literacy is so important for women of all ages

Amplify: Why financial literacy is so important for women of all ages

This is the weekly Amplify newsletter, where you can be inspired and challenged by the voices, opinions and insights of women at The Globe and Mail.

Erica Alini is a personal finance reporter at The Globe and Mail.

November is financial literacy month, a good excuse as any for personal finance nerds to spread the gospel “spend less than you make” and “learn to invest.” As a personal finance reporter at The Globe, my small contribution to the cause this year was to write a five-part newsletter series that is meant to be a crash course in money basics for newbies and anyone who wants to brush up on the fundamentals and pick up a few new hacks along the way.

It’s called the MoneySmart Bootcamp – and I hope you’ll consider recommending it to your mom and possibly your grandma.

Let me explain. While a big part of our intended audience is twenty- and thirtysomethings who are just starting to get their financial ducks in a row, I see another sizable group in dire need of a friendly, non-judgmental and accessible introduction to personal finance: Women who ‘ve been delegating money-management to their partners for their entire life.

Don’t get me wrong. There are plenty of women in or approaching retirement who can tell you with no hesitation what their life savings are invested in and why. But there are also many who don’t even know what their family’s assets and liabilities are, let alone how the financial market works. Some haven’t had a credit card to their name alone since they got married, if ever.

This becomes a real problem when the partner who’s been running the household finances suddenly exits the picture. Over the years, I’ve heard many times from financial planners and investment advisors about older widows who were, understandably, daunted by the prospect of taking the reins of their own finances after someone else had been in the saddle for decades.

These women are also more likely to become victims of fraud. I once reported the story of a 90-year-old widow who lost $60,000 of her and her husband’s hard-earned retirement savings – money squirrelled away during 25 years of working 12 hours a day six days a week – to fraud by her long-time advisor. It was the woman’s daughters, one of whom was a chartered professional accountant, who pieced together what had happened. Their mother struggled to make sense of the financial statements she’d been receiving and wondered whether her financial losses were due to the stock market plunge in the spring of 2020, at the onset of the pandemic.

Another financial reset that can send women scrambling is a divorce or relationship breakup. It’s hard enough to learn the basics of money management, debt and investing when you’re just getting started in life. But having to catch up at a time when your world feels like it’s falling apart is a whole other level of hard.

And if the split-up is acrimonious, financial control and know-how become weapons that can be wielded against women with frightening consequences. Over the years, I’ve had a few in-depth conversations with survivors of financial abuse and a few more superficial exchanges with others whose situations had all the troubling warning signs I’ve since learned to recognize.

The stories – both the ones I heard first-hand and the one I’ve read about – are strikingly similar. At the higher end of the income spectrum, you often have male partners emptying joint bank accounts, freezing credit cards on which they are the primary cardholder and concealing assets – a particularly easy task when the woman doesn’t even have a full picture of what the family owns. Amid low-income couples a common story is the man not only draining joint accounts of the woman’s own paycheques and government benefits meant for the children, but running up her credit cards and taking out loans in her name (which is, obviously, illegal) . Of course, men can also be victims of financial abuse, but statistics show women are disproportionately more likely to experience it.

And women who don’t have a credit history or whose credit has been wrecked by their partner will have a much tougher time rebuilding their finances or even securing housing, as landlords now routinely demand to see credit scores.

The common denominator in many of these stories is a lack of personal finance literacy. Of course, understanding the basics of money management won’t necessarily spare women a nasty divorce or keep them from ending up in an abusive relationship. And it certainly does not prevent widowhood. But it will make it a little bit easier to move on.

What else we’re thinking about:

Occasionally I have to watch TV for homework – my husband’s homework. Working in TV production, he understandably wants to make sure he’s watched the previous seasons of any show he’s hired on. And since there’s only one TV in the house and a narrow one-hour window to spend some quiet time together in the evening after our son has gone to bed, I always end up watching too.

The latest such mandatory viewing was a Paramount+ show called Never Seen Again and, I have to say, it didn’t feel like homework at all. The stories, as you can tell from the title, are about missing-persons cases. But this isn’t your usual true crime show. You find yourself empathizing with the families who are left behind rather than feeling like an armchair voyeur spying on other people’s pain. And with a number of episodes focusing on Black and Indigenous families, you’ll walk away with a much better understanding of the soul-destroying feeling of knowing that your child or partner is missing, and you cannot count on the police to do anything about it.

Inspired by something in this newsletter? If so, we hope you’ll amplify it by passing it on. And if there’s something we should know, or feedback you’d like to share, send us an e-mail at amplify@globeandmail.com.

.

Leave a Reply

Your email address will not be published. Required fields are marked *