How couples can become a financial superpower

In this episode of The long-term vision, CNET Managing Editor, personal finance expert, and author Farnoosh Torabi shares her thoughts on budgeting, inflation, mindful spending, and women and relationships with money. Here are some excerpts from Torabi’s conversation with Morningstar’s Christine Benz and Jeff Ptak.:

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

Torabi: Of course. I am the breadwinner in my marriage, have been from the beginning, and I wrote this book because I wanted to help many of the women who came to me with questions about how to thrive in their relationship when she was earning more than him. The reality is, is that there are more and more women in this role, playing this role, single mothers and women in couples. But we don’t necessarily grow up expecting this, and society certainly doesn’t expect or observe this for us. If you look at Pew Research, most men and women say it’s better for the man to be the breadwinner.

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

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And then there is the complexity of the ego. I interviewed a lot of men for this book, and what they honestly told me is that they were groomed and raised to feel like a true contributor in a marriage, like a provider in a marriage, you must. It wasn’t just a pleasure to have him. As if it were the need: man must provide financially. This is how he earned his title of good husband, good father, and it was something exclusive that he thought for himself. It wasn’t something his wife needed or should do. But if that wasn’t his role in the marriage, it could lead to a lot of confusion and loss of ego and wondering what my role is, what my role as provider is. And again, that can lead to communication breakdown, fights for who knows what reason, and fight. I mean, I’ve found that when women earn more in a relationship, there’s a higher chance of divorce. Money is, again, one of the main causes of divorce as it is. But then you add this layer of defiance, and it doesn’t take a scientist to figure out why this is happening.

So sometimes there are a lot of emotional challenges in relationships where you win the most. But the book goes on to talk about leveling the playing field where each person feels like an important contributor in the relationship, seeing money as a tool, a shared tool in the relationship. I would say that the first half of the book really only addresses some of these emotional challenges that come up in these types of relationships. Then a lot of that is also like figuring out their system: how are we going to pay for things. But those problems, I don’t think, are unique to relationships where she earns more. It could be only in relationships where there is an income disparity.

How women can negotiate better wages

Benz: So the data shows that women tend to earn less than men over their lifetime. They accumulate less wealth during their lifetime and are also more likely to be poor when they retire. So some of this seems structural. Women earn less than men on average, and are also much more likely to care for children, certainly, or their parents. But the data also suggests that women tend to negotiate wages less aggressively than men. What advice do you have for women on that front, how to improve their financial means, how to negotiate for themselves a higher salary?

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Torabi: Just do it. Do not doubt yourself. I can fully understand why women may not feel empowered to bargain and ask for more. It is because we have not been invited in this circle for a long time. And I’m talking about the financial circle, the professional circle. Money and work, a job where you get paid, is something that is relatively newer for women than for men and it is because the laws did not even allow us to have a credit card without a man signing us. until the ’70s. So we’re way behind not because we want to be, but because that’s, again, to the point, structurally, systemically, that’s how it’s been set for us. And so it’s going to take some time for us to feel the same level of confidence, perhaps, that men naturally feel. But we know this now, right? We know what fate we are facing and we know the cost of not asking for more and not investing sooner rather than later. And so, we just have to do it.

And I know there are a lot of studies that say there’s a penalty for asking. And my thesis, my theory is that grief 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’re the exception, and yes, you may be viewed more negatively than your male colleagues, because it’s a numbers factor. But as soon as more women are hired, that has to happen, but then when we do this collectively, and we do it at any cost, and we’re going to ask for it, and we’re not going to feel… we’re going to know that maybe there’s penalty, but we’re going to do it anyway. But more of us do, I feel like we’ve become a force to be reckoned with. And we’re not there yet. We’re not this force to be reckoned with where sometimes as the only woman in the office doing it and then we’re trying to encourage others to step up and speak up and ask for more. And the more we can stick together, that we can be mentors, that we can be advocates for each other when we’re not even in the room. There’s the mentoring, and then there’s the actual advocacy of someone that you want to see grow in your office, in your company that isn’t even there, but is speaking on her behalf. I think men can do this too.

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And so, this tip is not just for women. It’s for men, too: This isn’t just something women need to focus on, that women alone can’t solve. We need everyone to recognize that when women are paid fairly and when women earn more, everyone wins, everyone wins, households win, businesses win. You are more likely to stay at work. 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’s super productive, and if I pay her well and keep her happy, she’ll be with me for the long haul, and that’s it. an added value for my team and our company.

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