How Couples Can Become a Financial Superpower

On this episode of The Long View, editor at large at CNET, personal finance expert, and author Farnoosh Torabi shares her thoughts on budgeting, inflation, mindful spending, and women and relationships with money. Here are a few excerpts from Torabi’s conversation with Morningstar’s Christine Benz and Jeff Ptak:

Ptak: We also wanted to ask you about women and money. You wrote a book about when women make more than their spouses. As you point out, it’s an increasingly common scenario, but it can also introduce problems in some relationships. Can you outline some of those problems?

Torabi: Sure. I’m a breadwinner in my marriage, have been since the start, and I wrote this book because I wanted to help a lot of the women who were coming to me with questions about how to thrive in their relationship when she was making more than him. The reality is, is that more and more women are in this role, playing this role, single moms and coupled women. But we do not grow up necessarily expecting this, and society certainly does not expect or watch this for us. If you look at Pew Research, a majority of men and women say that it is better for the man to be the breadwinner.

And we can spend another hour talking about why that is. But to answer your question, which is what are some of the issues that come up, one is that your money is often a topic that couples do not talk about. Wherever they are financially, who is making what money, the bottom line is, money is usually a topic that is very taboo in relationships. But then, you add on to this a layer of complexity and nuance, which is she making more than him, which is culturally unexpected and not necessarily supported, then there’s communication breakdown, and there’s a lot of assumptions that the couples can make about, well, who holds the power now in the relationship. Do we feel like that – if money equals power, then does one person have more power than the other? Does the wife have more power than the husband? I mean, there’s a lot of like unspoken assumptions that may be made, because we’re maybe coming to the relationship with all these different understandings and expectations about the role of money in the marriage.

And there’s also the complexity of ego. I interviewed a lot of men for this book, and what they would very honestly tell me is that – they were groomed and raised to feel like a real contributor in a marriage, as a provider in a marriage, you must. It wasn’t just like a nice to have. Like, it was the need – the man must provide financially. It was how he sort of earned his title as a good husband, a good father, and it was an exclusive thing he thought to him. It was not something that his wife needed to do or should do. But if that was not the role that he found himself in the marriage, it could lead to a lot of confusion and loss of ego and wondering what is my role, what is my role as a provider. And again, that can lead to communication breakdown, fights for who knows what reason and struggle. I mean, I found that when women make more in a relationship, there is a bigger chance for divorce. Money is, again, a leading cause for divorce as it is. But then, you add this layer of challenge, and it it does not take a scientist to figure out why this is happening.

And so, there’s a lot of emotional challenge sometimes in relationships where she makes more. But the book goes on to talk about how to sort of level the playing field where each person does feel like an important contributor in the relationship, seeing money as really just a tool, a shared tool in the relationship. I would say the first half of the book is really just addressing some of these emotional challenges that come in these types of relationships. Then, a lot of it too is like figuring out your system – how are we going to afford things. But those issues, I do not think, are exclusive to relationships where she makes more. It could just be in relationships where there is an income disparity.

How Women Can Negotiate Better Pay

Benz: So, the data show that women tend to earn less than men over their lifetimes. They amass less wealth during their lifetimes, and they’re also more likely to be poor in retirement. So, some of this seems structural. Women earn less than men on average, and they’re also much more likely to be caregivers for children, certainly, or their parents. But the data also suggests that women tend to negotiate less aggressively for salaries than do men. What advice do you have for women on that front, how to improve their financial wherewithal, how to negotiate for themselves for higher pay?

Torabi: Just do it. Do not second guess yourself. I can completely understand why women may not feel empowered to negotiate and ask for more. It’s because we have not been invited in this circle for a long time. And I’m talking the financial circle, the career circle. Money and work is – work where you get paid – is something that is relatively newer to women than men and it’s because the laws didn’t allow us to even have a credit card without a man cosigning for us up until the 70s. So, we’re very behind not because we want to be, but because that’s, again, to your point, structurally, systemically, that’s how it’s been set up for us. And so, it’s going to take some time for us to feel the same level of confidence, perhaps, that men naturally do. But we know this now, right? We know what fate we’re up against, and we know the cost that comes with not asking for more and not investing sooner than later. And so, we just have to do it.

And I know there are lots of studies out there that say there’s a penalty for asking. And my thesis, my theory is that the penalty exists because we’re not doing it enough. When you’re the only woman in an office of men asking for a raise, yes, you are the outlier, and yes, you may be looked upon more negatively than your male colleagues, because it is a factor of numbers. But as soon as more women get hired – so that has to happen – but then when we collectively do this, and we do this at any cost, and we’re going to ask for it, and we’re not going to feel – we’re going to know maybe there’s a penalty, but we’re going to do it anyway. But more of us do it, I feel like we become a force that has to be reckoned with. And we’re not yet there. We’re not this force that has to be reckoned with where sometimes like the one woman in the office that’s doing it and then we’re trying to encourage the others to step up and voice and ask for more. And the more that we can stick together, that we can mentor, that we can be advocates for each other when we’re not even in the room. There’s mentorship, and then there’s actual advocacy for someone that you want to see grow in your office, in your company who is not even there, but you’re speaking up on her behalf. I think men can do this too.

And so, this advice is not just for women. It’s also for men to – this is not just something that women need to focus on, that alone women cannot solve for this. We need everybody to recognize that when women are paid fairly and when women make more, everybody wins, everybody wins, households win, companies win. There’s more likelihood that she will stay on the job. And by the way, women are excellent employees. I had a friend of mine who runs a newsroom. He said my favorite person to hire is a mom, because she knows how to prioritize her time, she is super productive, and if I pay her right and I keep her happy, she will be with me for the long run, and that is a value-add to my team and our company.

And not to make this all about the money, but sometimes you have to speak the love language of capitalists, and that is that women will make you money, but you have to learn how to pay them right and pay them fairly and provide them not just with money but with the benefits that they need. And if we know that more men are employers, this is a message to men. So, my advice is, ask anyway, ask in numbers, keep community of women and female mentors and male mentors tight, be not just a mentor, but an advocate. And message to men – when women make more, the world becomes a better place. This is just as much your game as it is a woman’s game.

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