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Open up and say money!

March 02, 2020

Money Sense

Cindy Waxer

woman playing with her dog at the beach

Women are typically regarded as natural-born communicators. But when it comes to money-talk, many of us are tongue-tied. Whether it’s asking for more of it or opening up to a loved one, personal finance remains an uncomfortable, taboo topic for many of us.

Part of the problem is women’s lack of confidence when it comes to money savvy. Only 31.4% of women consider themselves to be “financially knowledgeable” compared to nearly half (43.2%) of men, according to data from Statistics Canada’s Canadian Financial Capability Survey.

Bridging this gender gap begins with raising your voice and discussing finances when it matters most. Here are four conversations that are worth having with the most important people in your life.

Your significant other

Knowledge is power, especially when it comes to the state of your household finances. For this reason, women need to be aware of their expenses, retirement savings, emergency savings, debt load, and household budget. This starts with sitting down with your significant other and doing a household inventory of your finances at least once a year.

Another topic of conversation: your credit identity. Joint accounts can be convenient for many couples. But if you’re not the primary holder on at least one credit card, it may be difficult for you to get approved for other types of loans. Protect yourself by talking openly about your credit history and your need for financial independence.

Your employer

The average Canadian consumer owed $72,500 in debt at the end of September 2019 according to Equifax Canada. While debt consolidation can help ease this burden, savvy women are also demanding better pay. And for good reason: female employees aged 25 to 54 earned $0.87 for every dollar earned by men in 2018 (Statistics Canada). To get a raise, build a strong business case for why you deserve to earn more. Back up your request with hard numbers like performance metrics and sales figures. Walk in with a precise percentage salary increase in mind. And try rehearsing with a friend ahead of time to reduce nervousness. Only by having these difficult conversations about closing the wage gap can women work their way out of debt – and earn what they’re owed.

Your child or next-of-kin

For women with a family, life insurance offers precious peace of mind. In fact, the life expectancy for women is 84 years compared to just 79.9 years for men (Statistics Canada). At the same time, many women are the sole earners for their families. In both these instances, a life insurance policy can provide family members with financial protection, and ensure their financial needs are continually met in the event of one’s death. Although often an uncomfortable conversation, insurance-talk is critical to a family’s healthy financial future.

Your parents

Many adults feel awkward talking to their aging parents about their future financial needs and how they can help them to manage as they get older. This often stems from a worry that their parents will feel judged, or as though they are being treated like children. The simple truth, though, is that it’s much better to have these conversations when your parents are still healthy and independent. If a crisis hits and you haven’t discussed anything with your parents, you may find yourself scrambling to make financial decisions on top of dealing with emotional stress. No one wants that.

To get you started, here are a few tips:

  • Set up the conversation as a two-way dialogue where everyone can share their wishes, needs, worries, and goals.
  • Make sure you know where the important documents are and how to access them, including: wills, marriage and birth certificates, titles to property, insurance policies, power of attorneys, financial account information, mortgages, and other debts and tax returns.
  • Create a list of your parents' key contacts, like their attorney, financial advisor, and life insurance agent.
  • Discuss what kind of caregiving preferences your parents have, should their health deteriorate. What are they comfortable with, and have they taken that into consideration in their financial plan?

So speak up!

Opening up about your finances doesn’t have to be challenging! By having open and honest conversations with the most important people in your life, you can lay the foundation for a healthy – and independent – financial future.

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