Here’s Why You Should Be Talking About Money With Your Girlfriends
Do you know how much money your best friend makes? Or how much she has in her retirement fund? If you don’t know these things, have you ever thought about why you don’t? Money is often the one aspect of our lives that we feel weird talking about — even with our BFFs. But not discussing our finances openly could be doing women a disservice. In today’s “Financially Savvy Female” column, we’re chatting with Charlotte Cowan Geletka, CFP, managing partner at Silver Penny Financial Planning, about why you should be talking about money with your girlfriends (even if it feels uncomfortable at first!).
Keep Up With the Latest: Sign Up for The Financially Savvy Female NewsletterWomen and Money: The Complete Guide To Being a Financially Savvy Female
Women Benefit From Salary Transparency
Women currently earn 84% of what men earn, according to a Pew Research Center analysis of median hourly earnings of both full- and part-time workers. One way to close the gender pay gap is to know if you’re being underpaid and to ask for what you deserve if you find out that you are. But you can’t know if you’re underpaid if you don’t know what other people in your field are making, which is why it’s important to start talking openly about your salary.
“Give a range if you don’t feel comfortable saying the exact number,” Geletka said. “That gives the person a basis to know [if they’re being underpaid]. It’s good information as a resource to help other people be knowledgeable.”
Women Can Learn Valuable Financial Lessons From Each Other
“We as women are great communicators,” Geletka said. “Throughout history, we’ve been able to carry information back and forth about how to raise kids, etc., so I would say it’s critically important for women to talk about [money].”
Although it can be intimidating to bring up the conversation during a night out with friends, Geletka recommends starting with general questions like, “What kind of retirement plan do you contribute to?”
“Keep it open-ended to open up the discussion,” she said. “It should be an open dialogue because you’re going to gain a lot of information from your friends. If you walk into a golf clubhouse, [money] is all they talk about. [But if] you walk into a women’s locker room, that is not what you will hear.”
In addition to discussing retirement savings, Geletka recommends having an honest conversation about housing costs and how much of your income you spend on it.
“I’ve seen people overspending on housing pretty early on,” she said. “I think it’s critical in your early years right out of college, when you’re not in your higher-earning years, to make sure that you get off on the right foot financially.”
Talking About Finances Can Help Other Women Succeed
“Women like to help people,” Geletka said. “If you’re talking about it, you’re helping other people increase their knowledge.”
You should never shy away from sharing helpful financial advice because you feel like it’s “bragging.”
“It’s not bragging,” Geletka said. “Women don’t like to talk about [money] because they feel like it is showing too much pride, but I think you [should] flip your mindset. Having an open conversation about salary, about retirement, about cost of living, housing and spending, you’re actually helping those around you.”
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
More From GOBankingRates