Women are more involved than ever in their households’ investments and financial decision-making, but at the same time, a significant percentage say they are not confident in making those decisions, according to a new survey by Prudential Financial, in partnership with the Women’s Media Center and The Paley Center for Media.

The survey, which was launched in 2000 and is updated every two years, included a national sample of women aged 25 to 64, with a household income of $50,000 or more.
A full 95 percent of respondents indicate that they are directly involved in their households’ financial decision-making -- 25 percent are the primary decision-makers.

Among married women, 84 percent say they are involved in financial and retirement planning, and of these, 15 percent have sole responsibility. But at the same time, 86 percent of the women polled say they don’t know how to choose financial products.

"I think the great economic crisis was absolutely a wake-up call to them,” says Joan Cleveland, senior vice president at Prudential. "Women have a heightened recognition that they have to develop a long-term financial plan, but they are not putting programs in place to achieve those goals.”

Dealing With Different Styles

The survey found just one-third of women have a detailed financial plan in place, and, among the youngest segment, ages 25 to 34, just one in 10 has created a strategy. In addition, respondents were more conscious of the need to plan for retirement -- 72 percent acknowledged the importance of enrolling in workplace retirement programs, up from 47 percent in 2004. But roughly four in 10 women said they did not understand mutual funds or stocks.

Moreover, the economic crisis has heightened concerns about their children’s future. Some 44 percent of respondents say providing college tuition for children is "very important” versus 23 percent in 2004.

Yet the percentage of women who felt confident in their ability to do so declined to 21 percent from 26 percent in 2006.

"What was interesting is 82 percent of women said they needed some or a lot of help in making financial decisions -- but they are still really suspect of financial advisers,” says Cleveland. Women are most likely to turn to a spouse or partner for financial advice.

But finding a consensus on goals and the steps to achieve them can be difficult when partners lack defined roles or have different financial styles. For instance, research suggests "spendthrifts” and "tightwads” tend to marry one another and that couples who fail to "divide and conquer” financial chores save less for retirement.

Studying the Issues

Yahoo! Finance is teaming up with researchers at the University of Colorado Leeds School of Business and Duke University on a new study of couples and money. Colorado professor John Lynch and Duke doctoral candidate Stephen Spiller previously published a study in the Journal of Consumer Research showing people who have a propensity to plan long-term have higher credit scores.

Lynch and Spiller are studying the role of planning within married couples and the decisions they make. Readers and their spouses can participate anonymously; there is also the opportunity to receive personalized feedback on how your scores compare with norms from a prior national study. If you’d be interested in being part of their research, click here to participate. I’ll report the results in a future column.

The Prudential study did find one area of finances in which women felt highly confident: day-to-day decision-making, including managing bills, saving money and paying down debt. A whopping 93 percent said they feel knowledgeable about household expenses, and nearly two-thirds felt knowledgeable about the amount of money they needed to save for retirement.

"They understand bill-paying,” says Cleveland. "Overall, 80 percent say they can reduce their personal debt and they are confident they can manage household finances more tightly.”

Laura Rowley is a journalist specializing in personal finance and values, and author of "Money & Happiness: A Guide to Living the Good Life.

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