Women are achieving unprecedented financial success, yet they often face the unseen burden of managing finances. This article explores how to effectively navigate this third shift.
For years, many working women have balanced a "second shift," handling caregiving and household responsibilities after their jobs. Following this, they often take on a "third shift"—the unrecognized labor involved in managing the household finances.
This encompasses a range of tasks, from scheduling medical appointments and enrolling kids in summer activities to budgeting, bill payments, and evaluating long-term financial strategies. Even planning family vacations falls into this category. While vacations are enjoyable, they still add to the mental load.
On a positive note, women are becoming more financially empowered, often serving as primary earners or equal partners in their family’s finances. According to data from the Pew Research Center, in 45% of heterosexual marriages, women are either the primary earners or share earnings equally—an increase from 16% just a generation ago.
However, this financial progress can come with the added strain of managing these responsibilities.
Researchers refer to this as “cognitive labor”, which often disproportionately affects women. This can lead to heightened emotional fatigue, increasing the likelihood of job dissatisfaction and difficulties in adapting to workplace changes.
As a wealth advisor working with many accomplished women and families, including those with young kids or elderly relatives, I observe this issue closely. They may have ample resources, yet they often feel stressed and overwhelmed by their financial situations.
It’s not that these individuals lack financial management skills. Sometimes, as careers advance, financial situations can rapidly become complex. Both partners in a relationship might feel inundated by the financial tasks required.
You start with a job, a savings account, and a 401(k). Simple enough. Then, you marry, change jobs, have children, your partner shifts jobs, open 529 plans for each child, and may even inherit assets. Life gets busy, and before you know it, you have multiple accounts with varying tax implications, investment options, and individual goals.
You might accumulate employee stock options along the way, along with a Roth IRA, a health savings account, or a brokerage account. It’s easy for a family to end up managing a dozen financial accounts. You might perceive your finances as straightforward, yet life’s complexities can introduce significant stress, even if you can’t identify the source.
Even when you’re making all the right decisions, your finances might still feel complicated. You should be saving for your children’s education. You should plan for retirement. You should utilize various account types. Additionally, as women, we need to acknowledge that we statistically tend to live longer and take more career breaks for caregiving than men.
This planning is essential.
Often, the missing piece is an overall plan.
Many individuals have fragments of a plan. They might have separate accounts for retirement and education, but lack a cohesive strategy for how these elements interconnect. Moreover, it’s possible you don’t know how to maximize your investments or reduce unnecessary taxes.
Have you ever felt stuck with an extra $500, unsure how to use it? A larger sum can feel even more daunting. Mistakes can happen—like putting money in one account instead of another that would have been tax-efficient, or placing funds in an account that isn’t accessible when needed.
Your plan will vary, but it should begin with writing down your goals, understanding your risk tolerance (how much market fluctuation you can handle), determining your liquidity needs (when you’ll need access to funds), and recognizing your tax sensitivity (as income rises, tax efficiency becomes crucial).
If the intricacies feel overwhelming, it’s perfectly acceptable to seek professional guidance. While that may seem self-serving coming from a financial advisor, life is too short to worry about what others think when you hire help—whether for childcare during work hours or for fitness motivation. Seeking expert help to refine your financial strategy is just as valid.
The invisible burden of this third shift can have significant impacts. When women shoulder the dual responsibilities of work and financial management, they risk increased stress and long-term financial instability. By establishing a clear plan for both their careers and finances, every family member stands to gain.
The views expressed are solely those of the author and do not constitute specific financial, accounting, or tax advice. They represent the author's opinions as of the publication date and may change. The information is believed to be accurate but is not guaranteed. Mercer Global Advisors Inc. is registered with the SEC and provides investment-related services. Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved in investment services.
