For decades, working women have juggled the demands of a “second shift,” where they take on caregiving and household duties after the workday ends. For many women, after that comes the “third shift,” which is the invisible and often unacknowledged labor of managing the household itself.
This can be everything from coordinating doctors’ appointments and signing kids up for summer camp to overseeing budgets, paying bills, and assessing long-term financial plans. Even planning the next family vacation can fit into this realm. Yes, vacation is fun and valuable for family time, but it’s yet another planning task that takes up mindshare.
Part of this story is good news. Women are achieving greater financial success than ever before and are increasingly likely to be a full financial partner or even the primary breadwinner in their family. Data from the Pew Research Center shows that in 45% of opposite sex marriages, women are either the primary breadwinner or a roughly equal partner when it comes to earnings – this is up from just 16% a generation ago.
But for many successful women, this increased financial success is accompanied by the additional burden of managing it all.
Researchers call this “cognitive labor” and have found that it tends to fall more heavily on women, which can contribute to “greater emotional exhaustion, which, in turn, was associated with a higher likelihood of wanting to leave one’s job and a reduced ability to cope with workplace changes.”
As a wealth advisor who works with many successful women and families, often with young children or aging parents, I see this firsthand. On paper, they have all the resources they could need to thrive, yet instead of feeling confident and free, they are overwhelmed and stressed about their finances.
People in this situation usually aren’t bad at managing their finances. Sometimes, it’s simply the case that as our careers progress, our finances become complex much faster than we anticipated. It could very well be the case that both members of the couple have become overwhelmed by their finances and all the tasks required to manage them.
You start out with a job, a savings account, and a 401(k). Simple. You get married, switch jobs, have two kids, your partner switches jobs, you open a 529 for each kid, and you may receive an inheritance. You’re busy living your life and, without really realizing it, you’ve suddenly got a half-dozen accounts with different tax statuses, different investing options, all with their own goals and timelines.
You also have some employee stock options you earned along the way, and you may also have a Roth IRA, a health savings account, or a brokerage account. The point is, it’s not at all hard for a family to end up with a dozen financial accounts. You think of yourselves as people who have stable and straightforward finances, but life and time can make things complex, and at a certain point, you may realize this is a significant source of stress, even if you can’t put your finger on why.
In fact, when you’re doing “all the right things,” your finances are going to be a little complex. You should be saving for your kids’ education. You should be saving for retirement. You should be taking advantage of a range of account options. And as women, we must be mindful that statistically, we are likely to live longer and are more likely to take career breaks than men for caregiving obligations.
We should plan for all of this.
In fact, it’s often the case that the plan is precisely the thing that’s missing.
Many people have fragments of a plan. I have this account for retirement, this account for college, but you may not have an overall framework to understand how the pieces fit together. Further, you may not know how to maximize your investments or minimize unnecessary taxes.
Have you ever had the feeling of having $500 extra dollars and being paralyzed in terms of what to do with it? A larger sum of money can be even more paralyzing. The truth is that you can make mistakes – you can put money in one account when a different account would have saved you money on taxes. You can put money in an account that you can’t access when you need it.
One of the biggest mistakes of all, however, can be doing nothing with your money. Leaving far more than you need in a checking account, when you could be earning interest or benefiting from investment returns in the market, has a real cost. Some people who are doing nothing with their money say it is a matter of being able to sleep at night. That‘s a valid goal. But it’s likely that if you understand your options, you can create a plan that puts that money to work for you and still allows you to access the funds when needed, which is true peace of mind.
Everyone’s plan is going to look different but it should start with writing down your goals, knowing your risk tolerance (how much can you stomach the market’s ups and downs), knowing your liquidity needs (when do you need to access different funds) and knowing your tax sensitivity (as you climb income brackets over your career, tax savings become more important).
Finally, if the complexity is still overwhelming, know that it’s okay to hire help. Yes, I’m a financial advisor, and so that may sound self-serving. I believe life is too short to listen to people who would shame you for hiring a babysitter to cover the gap between the time your child’s school ends and your workday does, or a personal trainer to keep you motivated to make time to work out. It’s also too short to listen to people who would shame you for seeking professional help to optimize your financial plan, so you can have the confidence of knowing your money is doing all it can for you.
The cognitive labor of the third shift may be invisible, but its impact is anything but. When women bear the brunt of household and financial management on top of careers and caregiving, they face a heightened risk of stress, missed opportunities, and long-term financial insecurity. Because when women have a plan for managing not just their work, but also their financial lives, everyone in the family benefits.
The opinions expressed by the author are her own and are not intended to serve as specific financial, accounting, or tax advice. They reflect the judgment of the author as of the date of publication and are subject to change. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Mercer Global Advisors Inc. is registered with the Securities and Exchange Commission and delivers all investment-related services. Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment service.
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