Empowering Women: A Focus on Financial Independence

Throughout history, women have fought for greater financial independence, overcoming legal and societal barriers to achieve economic empowerment. From early pioneers in wealth management to the passage of the Equal Credit Opportunity Act in 1974, which allowed women to access credit without a male co-signer, progress has been significant but ongoing.* A recent series by the Smithsonian, marking the act’s 50th anniversary, highlights the lasting impact of these financial milestones and emphasizes the importance of continued awareness and advocacy.** These historical insights underscore why modern women should prioritize financial independence, ensuring they have control over their futures and the freedom to make informed financial decisions. Maintaining financial independence is important for everyone, but it can look different for women. Whether a woman chooses to maintain a full-time career, stay home and raise children, or do a combination of the two, maintaining her financial identity as an individual is essential.

It is important to recognize that the journey to financial independence can look different across various cultures. Cultural values, family dynamics, and community expectations can shape financial decisions and opportunities. Embracing these differences and finding culturally relevant strategies can help women from different cultures navigate their unique paths to financial independence. With that in mind, I would like to share some things to consider when focusing on your own financial independence as a woman.

1. Communicate

This is the most obvious, but I would be remiss if I didn’t mention it. The importance of healthy communication cannot be overstated. Open and honest discussions about your finances with your partner or spouse are essential. You don’t have to be the financial manager or financial decision-maker in your house, but you must actively participate in your joint financial life. This includes, but isn’t limited to, knowing where money is located, how money is spent, and understanding your financial goals both as individuals and as a unit.

2. Maintain a separate bank account

Joint accounts are practical for shared expenses and to simplify the management of household finances. However, maintaining a separate bank account is one way to feel financially secure as an individual.

3. Participate in finance-related meetings

Whether it is a meeting with a financial counselor, a financial advisor, an accountant, or even an attorney - make it a point to attend these meetings. Attendance at finance-related meetings will help you stay informed and engaged in the financial decisions that impact your financial health.

4. Focus on Retirement Equity

Ensure that you have your own retirement plan and that it is adequately funded. It is important for everyone to save adequately for retirement, but especially important for women as we are more likely to spend time outside of the workforce. A spouse that does not have earned income can open what’s called a spousal IRA to help bridge the gap between retirement savings balance discrepancies. Pension Fund also offers spouses of eligible members access to their own Traditional or Roth IRA.

5. Understand Your Shared Liabilities

It is crucial to be aware of any shared liabilities you have with your partner, such as mortgages, loans, or credit card debt. Understanding these obligations will help you make informed decisions and avoid being blindsided by financial issues in the future. Similarly, it is essential to understand assets to which you might not have claim like a house owned before marriage.

7. Consider a Prenuptial Agreement

While it might seem unromantic, a prenuptial agreement can protect your assets and financial independence. It is a practical consideration that may ensure both parties enter the marriage with clear expectations about finances.

8. Build and Maintain Credit

Maintaining good credit is crucial for your financial independence. Ensure that you have credit in your name and that you are building a solid credit history. This will be invaluable if you ever need to make significant financial decisions on your own.

9. Work with a qualified financial professional or LMFT

Working with a financial professional or a Licensed Marriage and Family Therapist (LMFT) can help you navigate financial discussions with your partner. They can provide guidance on how to manage your finances together while respecting each other’s financial independence. We know having these conversations can be hard, but trusted advisors may make them easier to navigate.

10. Redefine Household Contributions

Household contributions aren't solely financial. If you’re a stay-at-home mom or contribute in non-financial ways, like caregiving or homemaking, recognize the value of these contributions. Ensure that these are acknowledged and respected within your financial plan.

Maintaining financial independence as a woman is about staying informed, engaged, and proactive in managing your finances. Whether your household contributions are in the form of financial compensation outside the home or via roles inside the home, it is essential to balance your financial identity with your role in your relationships. By communicating openly, staying involved in financial decisions, and continuously building your financial literacy, you can ensure that your financial independence remains intact, no matter where life takes you.

If you would like to talk with a Client Relations team member about opening an IRA for you or your spouse, you can visit our Get Started page.