‘Gender Wars’: Who’s better with the money?

Since the dawn of time men and women have been at each other's throats about one subject or another. He says this. She says that. In part one of a special “Today” series called "Gender Wars" we tackle the often sore topic of money. Are women better than men when it comes to spending, saving and investing? To get some insights, the “Today” show asked David Bach, a financial expert and author of "The Automatic Millionaire" and "Smart Couples Finish Rich,” and Vera Gibbons, a special correspondent and contributing editor of the Kiplinger's Personal Finance magazine, to weigh in on the subject. Here are some of their thoughts:

HE SAID: DAVID BACH ON WOMEN AND MONEY:

Bach’s pet peeves about women and money:
Putting off dealing with your money because some man will ultimately take care of you:
I promise you prince charming is not coming. And if you marry a man for money you will pay for it for the rest of your life.

Putting off buying a home because you want to wait until you find a man and get married:
Nothing is sexier then a woman who owns real estate. Most important — nothing is more crucial to your financial security than owning a home. Men never put off buying a home and neither should a woman.

Thinking you don't need to be involved with the money because your husband is really smart and good with money:
I don't care if you're married to the local bank president, you need to be involved with the finances — because sooner or later you'll end up being in charge of them as a result of death or divorce. The time to get smart about money is now — not in a time of crisis.

"I'm not using my 401k plan because my husband uses his — and I'll get half of it anyway?":
What? Have you ever heard a man say, "I'm not using my retirement account because my wife uses hers?" That's insane. You are going to live 20 years longer than the man in your life. You need to use your retirement accounts.

Couples and money:
Budgeting does not work.
It's old-school advice that goes in one ear and out the other:
You will almost always fall in love with your financial opposite. In most relationships there is a born budgeter who falls in love with a born spender. And this creates the bulk of the fights in a relationship.

Couples fight about money because they talk about money at the worst possible times:
Money is the number-one thing couples fight about (other than sex). But if you have money fights you usually have less sex. Guys: The fastest way to increase your romance is fix your finances! Most couples fight about money because they discuss money reactively (when they pay the bills, at dinner, in bed, in the car). You need a proactive time to talk about money, which is why I teach couples to have a "Money Date." By having a money date you can actually make money somewhat romantic and you can get on the same page about your finances. The fastest way to stop fighting about money is do a "value circle" where you look at your values and discuss what is most important to you. It can instantly change your life and stop you from fighting. 

The single biggest mistake couples make is having a family "CFO":
In most relationships one person takes the lead role of family CFO. They pay all of the bills and track the finances. This leads to more fighting because the other person really has no idea where the money is going. The solution: Make a money date once a month to review where the money went. One person should pay the bills and the other can track the expenses through Quicken or Microsoft Money. Together you can review it. 

Other points on investing, spending and saving:

Studies show that men and women spend money fairly evenly — however, men buy fewer larger purchases and women buy more things that equal the same dollar amount. Debt for women and men is a huge problem. The average household is now reportedly approaching $10,000 in credit card debt. Couples should have a "he, she" and "we account." Credit card debt is not something you accept. It's something you conquer. You can't be rich, have financial freedom or security and be in debt. However, the advice of "pay your debt down" first is completely wrong. You have to pay yourself first and pay down your debt at the same time. Paying your debt first can cost you upwards of $250,000 over your lifetime. Parents teach their kids by example. It's what they do, not just what they say. Take your kids down to a local bank and open a savings account. Teach them to buy stocks — like my Grandma Bach taught me at age seven. She helped me buy my first stock in McDonald's. If couples take away simple expenditures during the day (coffee, cigarettes, whatever) you can actually put it away to save and plan on retiring with some of that money.  Consider the "Couples Latte Factor":

The Couples Latte Factor
$10 a day each
$600 a month
$7,300 a year
In 35 Years =$2,984,083
(Assumes 11% compound interest)

Women invest long-term, do more research, have better performance than men and generally listen to and work with advisors better than men. Women invest to reach their values. Men invest for sport, ego, instant results and "bragging rights." They act more impulsively and trade more often. The big myth is that women invest more conservatively than men and there is not proof of that. My experience is that men are becoming more than happy to have their wives work. At the same time many women are now choosing to not work and stay home with the kids.  This is actually creating the financial crisis that many couples face as they go from two-income households to one and are not prepared for the pay cut.

SHE SAID: VERA GIBBONS ON MEN AND MONEY:

Gibbons' pet peeves about men and money:
Men spend too much on gadgets and are terrible shoppers:
They buy big-ticket items when they do shop. They think they "need" an item when they make a purchase, where they just want it. Men typically buy things they "need" — things that they think hold value. Everything, in their minds, is thought of as an "investment" — even flat-screen TVs. Women, on the other hand, buy things that make the day work.

Men are overconfident with money and are "know-it-alls":
Men are overconfident in their abilities to make sound financial decisions. They trade stocks more frequently. They're more confident in their investing abilities as a whole and more aggressive. They're more involved in personally managing their investments and less prone to ask for help. They're more likely to act on a stock tip from friend. More women are investing (47 percent of all us investors today are women), but they're much more methodical and patient. They plot and plan and generally have lower-risk portfolios.

Men have an ego problem, and don't ask for help:
Women are more willing to listen/get financial advice if they need it. Thirty-seven percent of women cite financial advisers as their most important source of investing advice vs. 26 percent of male investors. Women are also known to look beyond short-term volatility and stay focused on long-term.

Couples and money:
Of all the issues that spark a fight, debt is at the top of the list. Couples often don't see eye to eye on how much debt is too much debt, and which kind of debt is bad debt:
Compounding the problem is that in many cases, one spouse enters the marriage with significantly more debt than the other. And of course, once you're married, your spouse's debts can become your problem. If they've got a bad credit score, that will affect your ability to get joint credit.

Our collective blind spot is unwillingness to talk openly about money:
This can lead to big problems down the line, like divorce! What to do: Establish a budget/spending plan. Two out of three disputes in the first year of marriage involve spending. Open separate accounts (his, hers and ours); discuss short- and long-term goals/expectations; schedule periodic financial updates just to make sure you're both on the same track.

The good news is that the majority of married men and women make decisions about vacations, savings and investments with equal input (recent survey from Roper):
This is the best way to handle your buying decisions — together — especially for the big-ticket items. As for everyday purchases: According to the Roper Survey, women usually decide what and how much to buy, so they carry the burden of running the household, and most women work as well. Women represent nearly half of the workforce, according to the Bureau of Labor Statistics. As a result, many women feel overextended and burnt out.

Why couples fight about money goes back to childhood:
Childhood experiences — the way money was handled growing up as well as self worth/age/image — all affect the way we behave with money as adults. Everyone is bringing their own money behavior from home, and everyone thinks their way is the way. That causes conflict, as do gender differences. If your spouse was overindulged as a child, he or she may now feel entitled to the best the world has to offer and then some, regardless of whether there's enough money to pay for the sun and the moon. If, on other hand, your spouse grew up without anything, constantly worrying about where the money was going to come from for the next meal, he or she is very likely a penny-pincher today.

Teach your kids about money early on. Set an example and make money management a part of everyday activities:
Give them an allowance when they're young. Walk them through the family budget. Open up a savings account for them as they get older. When they're 11-12, introduce them to the stock market. And when they become teenagers and start working outside the home, it's time to talk about tax-related issues, as well as retirement. In fact, when they're 16-17, open up a Roth IRA for them.

Women are much more impulsive as a group:
Women have the shop-'til-you-drop mentality. 

Other points on investing, spending and saving:

Our recommendation is that you each maintain your own individual account and then use a joint account for household expenses. And this is a growing trend: his, hers and ours accounts. Though you may find over time — once kids and mortgages come into play — that it's easier to merge the finances. Regardless, you want to have some system — a system you mutually agree upon. Women are much more methodical, patient, long-term players. They're less likely to take a hot stock tip and run with it and they're less aggressive than men. Women have lower-risk portfolios. Eighty-two percent of men are confident in their investing abilities, while, According to one recent study, only about 50 percent of women are (which is why they're more inclined to get financial advice if they need it). More women are investing today. About 47 percent of all us investors are women. We want to be financially independent, but because we live longer than men (about seven years longer) and make 25 percent less than they do, and are out of the workforce for a number of years taking care of our children and our aging parents, we need to invest more aggressively and set targets if we're to secure a financially sound future.

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