Millions of mothers will be doted on and deservedly celebrated this Mother's Day weekend. Moms provide us with love, support, and encouragement. They also give us plenty of advice, albeit sometimes unsolicited. But studies show that, when it comes to finances, we shouldn't ignore Mom's pearls of wisdom.
Ruler of the purse strings
Globally, women control more than $20 trillion in consumer spending. They have the final say in 91% of home purchases, 80% of health-care choices, and 66% of computer purchases. And these trends toward controlling the purse strings are likely to continue. By overseeing so much wealth, women have certainly picked up a thing or two about finances.
Let's look at three key reasons women make great investors.
1. Women stay the course during choppy markets
Vanguard analyzed the activities in nearly 3 million IRA accounts during the 2008 and 2009 financial crisis. The fund company found that women were more likely to leave their stock portfolios intact, not freak out and sell at exactly the wrong time. During the most recent chaos in the financial markets, women exhibited the enviable ability to hunker down and ride out the storm.
To the frustration of their male passengers, women often exemplify this tactic when driving a car, by picking one highway lane and sticking with it. Traffic may speed up in nearby lanes, but Mom knows that by staying the course she'll end up at her destination (with fewer dings in the bumper and better gas mileage, too).
2. Women are more focused on comprehensive planning
Sure, women like making money in the stock market. But that's not where financial planning ends for Mom. Instead of zeroing in solely on investment returns, women tend to take a more holistic approach to financial planning, since she's often left to deal with tough issues like estate planning and long-term care for loved ones.
Because of divorcing, outliving their spouses, keeping finances separate, or choosing a single life, at some point in their lives, roughly nine out of 10 women will be solely responsible for managing their finances. This fact really validates the importance women place on planning comprehensively for their financial futures.
3. Women save more of their income
A Fidelity study points out that, despite making less money than their male counterparts, women save more of their income. On average, women's salary deferrals for retirement savings are 8.5%, versus 7.9% for men. So while Mom might not bring home as much bacon as Dad, she certainly knows how to use it wisely.
Foolish final thoughts
Take time this Mother's Day to say thanks for all Mom does. Tell her how much you appreciate her advice (even though you may not always take it to heart). Buy her some flowers and take her to brunch. And don't forget to bring your 401(k) statement to have this household CFO take a look!