In every relationship, we all fall into habits depending on the people we’re with. The roles we have with our parents, say, tend to be pretty different to those with our colleagues, our romantic partners or our friends.
Usually, these dynamics form naturally, and over time, until they become an ingrained part of not just how we see ourselves, but how other people see us too.
Letting your partner manage your finances can feel easy, but it can put women especially at a serious disadvantage.Credit: Dionne Gain
That one friend becomes the person who always books the group catch-up. Your brother becomes the person to always barbecue at family get-togethers. Your partner manages the finances and you manage the day-to-day life admin.
Often, these divisions of labour and the roles we play work well and help the wheels keep turning. And as long as everybody’s happy, what’s the problem?
You tell yourself that your brother is a better cook than you, that your friend enjoys organising things, that your partner is just better at keeping on top of the bills. All of which may be true, but this way of thinking can also be a form of learnt incompetence. And when it comes to our finances, that’s a problem.
Learnt incompetence, which is also known as weaponised incompetence, is one of those things that we’ve all experienced or participated in but, until recently, haven’t had a term for.
Despite more Australian women working than ever before, ingrained social norms still play out in heterosexual relationships.
As Carly Dober, director of the Australian Association of Psychologists, explained to the ABC earlier this year, learnt incompetence “demonstrates helplessness, real or false, to avoid certain tasks or responsibility”.
And hey, in a world where we face a million decisions every day, I get it. Asking your partner to cook dinner because they’re “better at it” than you after a long day is tempting. But that same learnt incompetence should never, I repeat never, be applied to your finances. Let me explain why.
The first reason is that when you tell yourself – and others – that you’re not good with money, or that your partner is better than you are, you imply a few things: that you don’t understand finances, and that you aren’t interested in learning and figuring them out.
For the record, not understanding is extremely normal. None of us are born knowing how to create a budget or read economic trends! But you owe it to yourself to learn the basics because the sooner you do, the sooner your hard-earned money will begin working hard for you in return.
This mindset of learnt financial incompetence also puts you at risk. Without a clear understanding of how much your household has coming in and going out, your debts and assets, your investments, and if you’re on track to meet your long-term financial goals, you’re not just giving over your money to someone else, you’re giving over your power.
This is something we see changing among men and women, but the change is far too slow.
Despite more Australian women working than ever before, ingrained social norms still play out in heterosexual relationships when it comes to the division of finances, where women tend to manage day-to-day household budgets and men manage the “big” stuff.
In March, a YouGov poll found that 55 per cent of Australian women are now actively engaged in creating and maintaining a household budget, and 44 per cent are saving for an emergency and/or retirement.
But when asked about decisions around real estate or property investments, that figure drops to just 23 per cent. For investing in stocks, bonds and/or mutual funds, it declines to fewer than one in five women (19 per cent), and 18 per cent for managing tax planning.
And it’s here where that giving away power comes into play. According to a recent study from the University of Essex, within almost half of all Australian heterosexual couples (43 per cent), men and women have different levels of risk tolerance when it comes to investing.
According to the study, men tend to be more likely to take greater financial risks, whereas women tend to be more conservative and want to play things a little safer.
As lead researcher Ran Gu explained of the findings, “For example, a man might prefer high-risk, high-reward stocks, while his female partner prioritises safer, long-term investments. If the man dominates the decision-making, the family portfolio might be exposed to a level of risk the woman finds uncomfortable, potentially jeopardising their financial security.”
The other issue with learnt financial incompetence is that you run the risk of it sowing the seeds of resentment in your relationship. Think about how you feel, for example, every time the school rings you by default instead of your husband, even though you’re both listed as contacts.
Or you have to organise every birthday party or present because “you’re better at that stuff”. Over time, it adds up and you find yourself understandably frustrated.
While it may not be intentional, learnt incompetence creates an environment where someone steps in and takes over the management role because they feel they have to, not because they want to.
If a couple has made the decision together that one person will manage the household finances, that’s entirely OK. But for it to work, there should be regular check-ins to cover off how your financial goals are tracking and to ensure the person managing is still happy to do so.
Even if it is true that your partner knows more about finances than you do, remember that a good partner will talk you through it and help you get across it.
If you’re the person who is taking the back seat at present, ask yourself: Why do you think you’re bad with money? Why do you think your partner is better, and what could you learn from them? What is it that you don’t understand, and how can you go about learning more?
If you’re the person managing things, even if you are happy to be in charge, let your partner know that you value their opinions and input on the decisions you make.
Change is rarely as hard as we imagine it to be – it’s often just that we’re scared to take the first step. But like any bad habit, learnt financial incompetence can be just as easily unlearnt if you put your mind to it.
Victoria Devine is an award-winning retired financial adviser, a bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and director of Zella Money.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.
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