Women are increasingly taking charge of their finances as well as their families' budgets

For years, Vanessa Lee Taub had left her family’s financial planning needs to her husband. After all, he was the one who was good with numbers and investments so she didn’t interfere in the process of money management other than knowing the big picture of how much money they roughly had together.

That worked well for a decade and a half until her marriage crumbled. When she divorced, the mother of two found herself quite literally lost at sea; worried about her expenses and concerned for her long-term future.

“It was devastating and frightening. I literally got to the stage where I was struggling to feed my kids,” said Lee Taub, who has since become a financial advisor to ensure other women are spared the same plight.

Lee Taub represents many women in first world economies, who, having taken little interest in personal finance, often find themselves caught in a financial bind when disaster, whether it be divorce, separation or death, hits.

“The sad truth is overall financial literacy among women in terms of their awareness in taking control of their financial future is very low,” noted Assistant Professor of Finance Lily Fang at Singapore’s INSEAD Business School.

Australian research showing less than one quarter of women actually understand the concept of personal finance in that country is indicative of the state of women in general, noted Fang.

Though more than ever before, women now have better access to education, promising career prospects and bigger disposable incomes, few seem to have made the same leap in the domain of personal finance.

“Women seem to think of a man as their financial plan. Of course, that only works so long as a marriage is going well,” said Andrea Gutwirth, founder of SoulTalk, a Hong Kong charity for women in emotional and relationship crisis.

“Divorces can be particularly devastating for women who have not only lost the family structure they have known for years.  The situation is further compounded by the fact that they don’t have any money of their own,” Gutwirth added.

There has been no time more pertinent than now, say experts and financial planners, for women to take charge of their own finances given that more women are working and living longer, the rate of divorce is higher, with a growing number of single-parent households headed up by mothers.

Even in financially savvy Hong Kong where non-investors are the anomaly, women have been left behind. “There is a myth about Hong Kong,” said Alisha Ma, a wealth manager at Financial Partners, an independent financial advisory firm.

“People here may be active investors but investment is just one component of financial planning. There is much more involved, such as wills, retirement, insurance and emergency funds, but speculators don’t want to know the rest of the picture,” she said. “Hong Kong remains a traders’ market. People like active trading and short-term gains, and many have a get-rich-quick mentality. They think having a diversified portfolio is boring.”

Having said that, there has in recent years been a growing awareness amongst women for the need to take charge of their own personal finances, noted Ma, who has given presentations on the subject to everyone from female professionals in the banking and finance sector to the general public.

“Personal finance is not rocket science but does require a lot of planning and strategic thinking about future goals,” she explained. “Most people are not programmed to think about the long term in this way. People choose to deal with the present and are more reactive to situations,” she added.

Though a good first step, this heightened awareness of financial planning has yet to be translated into any notable action, said Gutwirth.

“It comes back to this deep inner feeling that women have of relying on the man to look after money and to fix the financial situation,” she said. Some 99 percent of divorce cases she encounters involve women with no money or assets of their own.

“This scenario plays out across all age groups and spans the social spectrum from domestic helpers to the wives of CEOs. There are no boundaries,” she said.

Part of the reluctance women have of engaging a financial planner for help, advisors say, stems from a phobia they have to entering a traditionally “male” domain and of confronting spending patterns and lifestyle choices.

Working with a financial planner has been described by one individual as “like going to confession,” while others have complained of feeling “naked” because they have had to divulge full details of their bank accounts and spending.

“Personal financial planning is not about financial knowledge,” said Ma. “It is a habit and we provide a structure from which people can form the right habits to create wealth.”

In efforts to heighten financial literacy for the general population, Financial Partners began in March a series of lectures on personal finance, which it hopes to continue in the long term.

“It is important for women to take responsibility for their finances and be part of the decision making process,” said Ma. “Things can change in a moment and if you don’t have a financial plan in place, it could have a huge impact on both men and women, although women are more vulnerable because they usually choose to take time off to have kids and that brings down their earning power.”

Gutwirth knows well the consequences of not stepping up to the plate in matters of financial management. She had no idea how to manage the lump sum settlement she got from her divorce because the mother of four had never dealt with money before.

“You are likely to spend it all if you don’t understand the value of money, which was what happened to me,” she said. “I ended up listening to someone’s advice and lost all the money over a bad investment decision.”