Older Wives Manage the Finances if Husbands Decline

The consensus in the research is that women’s financial literacy is lower than men’s. Maybe women aren’t as interested in the markets, and many are too busy juggling a job with taking care of the children to find time for financial matters anyway. Women’s general aversion to finance may also be akin to their lack of confidence in their math skills.

But something interesting happens in old age. Wives will rise to the challenge and take over the finances from their husbands if they have to.

A new study of older couples finds that wives’ financial competence increases as they try to compensate and prevent costly mistakes when they see that a husband’s executive function is slipping.

“Specifically,” the researchers said, “cognitive decline in their husband positively predicted wives’ ability to adequately carry out specific financial tasks.”

This situation is not that unusual because husbands are usually the older of the pair. That was the case for the 63 Australian couples in this study, whom the researchers followed for a decade. The couples were all in their 60s, 70s or 80s. But the husbands, with their age disadvantage, exhibited more signs of decline in a battery of cognitive tests, even though they also showed they were more knowledgeable about financial matters.

It can take some work for a wife to take over, however, because men may be reluctant to turn over financial control. To the extent that wives have managed any of the household finances, they tend to focus on “financial chores” such as keeping the checkbook in order. Men are also very confident of their ability to manage the finances – more so than women – and may not see the need to give it up.

But the wives are trying to prevent potentially serious mistakes, such as missing a homeowners insurance payment or investing in a fraudulent scheme. In fact, the risk of mistakes can occur seemingly overnight, because financial missteps are one of the earliest signs that someone is developing dementia.

This study shows that the interrelationship between two partners managing the finances “is not only a theoretically but also practically important question,” the researchers concluded. “Understanding factors that contribute to financial decision-making in late adulthood is particularly critical.”

Squared Away writer Kim Blanton invites you to follow us @SquaredAwayBC on X, formerly known as Twitter. To stay current on our blog, join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here. This blog is supported by the Center for Retirement Research at Boston College.