We all come to the table with different money baggage, misconceptions, insecurities and beliefs. By the time people meet with a financial advisor, some of these beliefs are deep-seated. In my personal experience with clients and friends, I’ve seen that it’s often women who find themselves fighting a scarcity or “broke” mindset.
One client in particular comes to mind as an example of this. She grew up in a very impoverished home and despite her own success and grit, she always felt she never had enough. When she sold her company and found herself “out of a job,” she had anxiety about transitioning from a paycheck to allowing her funds to provide for her.
When we ran through our planning process for this client, we considered her annual spending, taxes and other financial goals. On top of that, we illustrated negative market performance year after year to stress the investments that she was now relying on to provide income. Through that exercise, we were able to demonstrate to the client that her portfolio was resilient enough to continue to provide for her and her children.
This exercise finally helped provide her peace of mind and the freedom to enjoy the fruits of her labor. It gave her the confidence to know that even with the volatility in the markets, her portfolio was designed to be durable.
What Women Experience and Internalize
Unfortunately, it’s not surprising that my client originally felt this way. Women often face unique challenges in financial decision-making, which can stem from societal messaging, family influences and cultural norms.
A study by the Journal of Economic Behavior & Organization actually found that the stereotype that women are “bad with money” directly increases financial anxiety in women. Additionally, historical wage gaps and caregiving responsibilities can contribute to a lack of financial confidence.
Despite these challenges, women are increasingly taking charge of their financial futures. By 2030, women are projected to control around two-thirds of private wealth in the U.S., marking a significant shift. Women are often the primary decision-makers in households, making significant financial decisions such as buying homes, cars and appliances.
Teaching a New Way of Thinking
As a financial advisor, it’s crucial to recognize and address these challenges while empowering women to achieve their financial goals. Here are a few strategies that can help, such as what we employed with my client:
1. Encourage Self-Reflection
Ask clients to consider what they were told about money growing up, what money behaviors were modeled for them, and what emotions come up when they think about money.
2. Validate Feelings with Facts
Suggest that clients take inventory of their current financial situation and see if they can validate their feelings with facts. This can help them see their progress and achievements more clearly.
3. Reframe Financial Setbacks
Help clients reframe financial setbacks as lessons rather than failures. This can build resilience and a more positive outlook on their financial journey.
4. Set Clear, Achievable Goals
Move from abstract concepts to concrete actions by helping clients set clear, achievable financial goals. This can provide a sense of direction and accomplishment.
5. Address ‘What-If’ Scenarios
Use financial plans to stress-test various scenarios, such as job loss or poor market performance. This can help clients see that their fears may be less daunting than they appear and provide opportunities to take corrective steps.
By addressing these worries head-on and providing tailored support, financial advisors can help women overcome that scarcity mindset and build confidence in their financial decisions. Empowering women in this way not only helps them achieve their long-term financial goals but also contributes to a more equitable and prosperous future.
Joan Fields is a senior vice president and private wealth advisor at Bank of Oklahoma, a BOK Financial subsidiary. With more than 20 years of experience in the finance sector, she’s passionate about helping clients and their families manage their wealth and ensure that wealth is passed on based on their wishes. She holds degrees in finance and financial planning from Northeastern State University and DePaul University, respectively.
