Single women feel more informed about their finances than married women, according to a new report by UBS.
The Swiss investment bank surveyed investors who had never been married, including millennials with at least $250,000 in investable assets, and Gen X-ers and baby boomers with at least $500,000 and $1 million, respectively, and compared them to married women with at least $1 million in investable assets. (UBS surveyed about 1,500 people.)
While most single millennials want to get married and 79% expect their future spouse to provide financial security, being single has its own financial rewards. Single women know a lot more about investing than married women – 45% vs. 28%. Single women are more confident that they can make long-term investing decisions and they monitor markets more regularly than married women. When it comes to long-term financial expectations, 83% of single millennial women expect to invest, compared to only 39% of married millennial women.
One UBS survey respondent who is single and 53 characterized her money management decisions this way: “For sure I am more involved than if I were married. As a single person, there is only me to make all decisions and consider all investment options.” It’s a notion that is probably representative of many in her cohort.
Single millennial women are least engaged with their finances
While single millennial women are more engaged in their finances than married women, they still lag behind single Gen X and boomer women. Sixty-one percent of millennials say they put other parts of their life ahead of finances, compared to 28% of baby boomers. While they do have investments, fewer millennial single women know exactly what types of investments they have, compared to women who are older. And fewer single millennial women know how much they’re saving for retirement compared to boomers: 69% vs. 93%.
While single millennial women made strides compared to married women in terms of financial knowledge, once they get married, they fall back into that trend from their mothers’ generation of relying on a spouse to make money decisions for them. Once married, 57% of women leave financial decisions to their spouse – and surprisingly, 61% of millennial women say they let their spouse make the financial decisions.
Rachel Gottlieb, UBS wealth management senior vice president, says it boils down to feeling intimidated. “Whoever you’re asking – whether it’s your financial advisor, whether it’s a spouse – if they’re not answering you in a way that you can understand, it’s human nature to…tune out after a while,” she says. “But it’s to our detriment.”
Playing Russian Roulette with retirement funds
Millennial women engage in riskier financial behavior than older generations by dipping into their retirement accounts early, UBS found. More than 30% of millennial women have done so, while just 5% of boomers have.
Gottlieb says millennials’ willingness to withdraw from retirement accounts is alarming. “[It] means that you have to pay a penalty [in addition to income tax on the distribution] and that’s crazy,” she says. “I think it’s because they don’t quite understand it – that this is money that can compound and that it can grow. They may not realize that not all assets are equal.”
Single men still more confident
While single women feel more financially confident than married women, single men say they know more about money management than both, according to UBS. Of the single men surveyed, 61% say they know a lot about investing, compared to 45% of single women and 28% of married women. More single men (63%) reported that they pay attention to the markets than both single (47%) and married (37%) women.
Gottlieb says 8 out of 10 women will one day find themselves solely responsible for making financial decisions either because they got divorced or are widowed. It’s never too early to take control of one’s finances even if you’re married.
“When you’re going through a difficult time because of the loss of a spouse, or because you’re going through a divorce, there are a hundred things that feel out of whack. It’s not the time to start to learn about it,” says Gottlieb.
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