As Women’s Income Rises, So Should Financial Planning

May 31–The traditional household of mom, dad and children is no longer an accurate reflection of many of today's modern families; more women are under pressure to bring home the bacon, not necessarily because they have volunteered to be head of the household.

An increasing number of women find themselves responsible for providing for their families due to divorce, the death of a spouse, single parenthood and same-sex relationships. The role comes with the added burden of calling the shots when it comes to planning the family's financial future.

"Women approach decision-making differently than men," said Lori Sackler, a senior vice president at Morgan Stanley Wealth Management in Paramus, N.J., and author of "The M Word: The Money Talk Every Family Needs to Have About Wealth and Their Financial Future."

"For those women faced with dealing with financial issues around their families for the first time, it adds pressure, no doubt," Ms. Sackler said. "But women have been taking on this responsibility in increased numbers for at least the last 50 years."

The Pew Research Center in Washington, D.C., reported this week that women are now the main income earners in a record 40 percent of American households with children, up from 11 percent in 1960. While most of these families are headed by single mothers, a growing number are families with married mothers who earn more than their husbands.

U.S. Census data also indicates the number of households led by women are rising. The 2010 Census counted 15.3 million female heads of household with no husband present, while the 2000 census showed 12.9 million. In the Pittsburgh metropolitan area, there were 114,391 female heads of households with no husband, according to the 2010 census.

"Families come these days in many different flavors that look differently from Ozzie and Harriet," said Katie Libbe, vice president of consumer insights for Allianz Life in Minneapolis. "Women are at the center of some of these non-traditional families.

"We know divorce or widowhood can throw them into a financial crisis," she said. "Then other things start to happen. Adult children move back home and aging parents who are not financially sound could move back in with some women or they may have to help them pay for rent."

Allianz Life conducted a study earlier this month of 2,000 women ages 25 to 75 with a minimum household income of $30,000 a year. Only 39 percent of the respondents were married; 32 percent are currently or have been divorced; 17 percent are in a relationship but not married; and 9 percent are currently or have been widowed.

The study found 67 percent of women who are head of their households say their family situation creates a new level of the need to be financially aware and independent; and 59 percent said their unique family structure has made them become more active and involved in financial planning.

That can mean different things to different families.

Same-sex couples don't enjoy many of the benefits heterosexual couples are entitled to when they share property, such as rights of inheritance or the ability to make medical decisions for their partners. Same-sex couples will likely have even greater pressure to stay on top of legal matters and be financially aware.

Single women, meanwhile, face serious challenges when it comes to economic security and poverty. The National Women's Law Center in Washington, D.C., reported that in 2011 the poverty rate for female-headed families with children was 41 percent, compared to 22 percent for male-headed families with children and 9 percent for families with children headed by a married couple.

The rates were even higher for African American, Hispanic and Native American female-headed families with children.

In Pennsylvania, more than 41 percent of female-headed families with children live in poverty.

"It's really disturbing that in this country we have so many families headed by women living in poverty," said Joan Entmacher, vice president for family economic security at the National Women's Law Center.

She believes changes need to be made to corporate and public policies to address the growing issue.

"It's the result of unequal pay for women, workplaces that don't allow women to combine their work and family responsibilities with polices like paid leave and even sick time," Ms. Entmacher said. "Also, public policy doesn't provide adequate support for basics like child care."

Child care is a necessity for single mothers to be able to earn a living, yet Ms. Entmacher said only 1 in 6 children eligible for child care assistance receives it because the program is underfunded by the federal and state governments.

Tim Grant: tgrant@post-gazette.com or 412-263-1591.

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