Modern Families And Money

By Neal St. Anthony, Star Tribune (Minneapolis)

June 15--The so-called traditional family of mom-dad-kids no longer accurately reflects today's modern families that include single parents and same-sex couples. That change has put more pressure on women to attain financial independence, according to the 2013 Women, Money & Power Study from Allianz Life Insurance Co. of North America (Allianz Life).

Sixty-seven percent of women in today's modern family -- including single, divorced or widowed moms and same-sex couples -- say their family situation creates a heightened need to be financially aware and independent. Nearly 60 percent say their family structure has made them become "more active and involved in financial planning," Allianz found.

The survey of more than 2,000 women ages 25-75 with a minimum annual household income of $30,000 found that married women are now the minority group in terms of current relationship status: only 39 percent of respondents.

Pew Research also recently reported that women are the main breadwinners in 40 percent of American households, for a variety of reasons, including that so many of them are single parents and because 15 percent of women now make more than their husbands in households where the median family income is $80,000. That compares with a national median income of only $23,000 for single-mom households. Many mothers have had to get a job since the Great Recession.

Katie Libbe, an Allianz vice president, shares her thoughts on the topic.

Q: What insights did your recent study provide?

A: One thing that came across clearly in our study is that women today are more financially engaged and empowered than ever before. The financial crisis of 2008-2009 was a major driver of this change.

Our "Women, Money & Power" study echoes the Pew report, with 60 percent of women saying they are the primary breadwinner and more than half describing themselves as household CFO. This is encouraging news, but we also found that women still have unmet needs when it comes to achieving comfort and confidence with money. With nearly half of all women saying they sometimes fear becoming a "bag lady," it's clear that there is more work to do in educating women about financial matters and building their confidence in their own financial future.

Q: What percent of female-headed households live in poverty compared with two-parent households?

A: According to the 2011 U.S. Census data, approximately 31 percent of female-led households (with no husband present) lived below the poverty line, including those with and without children, vs. only 6 percent of married couples. This reflects feedback from our study about the pressure that women feel about managing finances, particularly from single moms. More than 90 percent of never-married single moms said their family situation "creates a whole new level of need to be financially aware and independent."

Q: Your research indicates that divorce among heterosexual couples and widowhood is what often brings on financial anxiety and trauma for many women. Can you expand on that?

A: Divorce and widowhood continue to trigger financial trauma for many American women -- a trend that we found is growing. When we did the original Women, Money & Power Study in 2006, we asked the same questions about how those life events can throw women into financial crisis. Nearly half (48 percent) of divorced respondents in 2013 said divorce threw them into financial crisis, up from 43 percent in 2006. A full 50 percent of widows in 2013 said widowhood caused them financial crisis -- double the response from 2006.

The key take-away from this is that women can't rely on someone else for financial security.

Q: What does today's "modern family" look like, based on the Allianz survey?

A: Today's modern family comes in a variety of different flavors. No longer are we only seeing that classic Ozzie and Harriet structure of mom, dad and kids. Instead, we are likely to encounter a nontraditional family where women are at the center of the household. This includes single moms, divorced, widowed and same-sex couples.

Q: You note that 80 percent of respondents say they have been a single mom, divorced, widowed or in a same-sex relationship. Where do gay couples fit on the family income-financial pressure index?

A: Same-sex couples feel a great deal of financial pressure due to their unique family situation.

One reason for this may be due to the fact that same-sex couples face significant barriers, and in many cases a process of self-education, to achieve the same benefits that married couples automatically enjoy.

As a result, same-sex couples seem to be more engaged overall, with a higher level of interest in financial planning. Forty-two percent of women in same-sex couples currently work with a financial professional vs. 38 percent of all women surveyed.

This increased engagement translates to their financial health as well, with 40 percent of same-sex households reporting annual incomes above $100,000 vs. only 17 percent for opposite-sex couples.

Q: Does it make sense to have a simple financial plan and budget even if your family is struggling financially?

A: Yes. A financial plan of any kind is always a good idea, no matter if you're well on your way to a comfortable retirement or struggling to make ends meet.

Keep in mind, a financial plan doesn't have to answer every question at once. It often starts with establishing a budget so you can have a better understanding of monthly expenses and how much you can afford to allocate to things like paying off debt and starting a retirement savings account.

Neal St. Anthony --612-673-7144

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Source:	McClatchy-Tribune Information Services
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