Tips & advice on getting your finances back on track.
March is Women’s History Month, which highlights the contributions of women throughout history and contemporary society. The history of women in finance doesn’t date back as far as you may think. Once married, women were expected not to work and take care of their families. This means they had to solely rely on their husband’s income and not have finances of their own. This has thankfully changed over the years with many financial milestones along the way that changed how women in finance are viewed today.
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Women entering the workforce
In the early 20th century, most women in the United States did not work outside of the home. The expectation of a woman was to get married, manage their household, and raise the children. The women who did work were usually young and unmarried. During this time, just 20% of women worked outside off the home, and only 5% of those women were married. By 1930, however, women started entering the workforce and work participation rates reached nearly 40% for single women and about 12% for married women.
Read More: Women And Financial Planning
By 1950, 47% of married women remained in the workforce. This increase of married women working was the result of the rise of offices requiring clerical workers. Many of the women working during this time felt the need to do so because of their husband’s income. If their husband had a high income, the less a woman would feel they “needed” to work outside the home. If their husband’s income didn’t fully meet the needs of the family, women could seek a clerical job to help out with family income. At this time, women didn’t work because they were passionate about their careers. They were working more so to help their families financially.
Equal Credit Opportunity Act
Although in 1950 the number of women working was on the rise, women were still not allowed to open a bank account in their own names. Although they were making their own money, they weren’t allowed to have their own bank account to save it. It wasn’t until the 1960’s when women gained the right to open a bank account. The next financial step was being able to open their own credit accounts. Unfortunately, this didn’t happen for women for another decade.
In 1974, the Equal Credit Opportunity Act passed which was supposed to prohibit credit discrimination on the basis of gender. This was an incredibly important step for women in finance. Not being able to open a credit card in their own name was a huge limitation for women. They did not have options or access to their own finances which led them to be stuck in situations and bad marriages they didn’t want to be in. Having access to their own bank accounts and credit cards put women in charge of their own finances and, by extension, their own lives.
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Women advancing in the workplace
With the ability to open bank accounts and have their own lines of credit, women felt they had a say in their household finances. This led them to seek out more opportunities to work and advance within the workplace. By this time, women were also realizing they could balance work and family. This is when the two-income family started to emerge and when families began to accumulate wealth for themselves. With a duel income, families were able to save more and provide even more opportunities for their children than they could before. They were able to buy homes in nicer neighborhoods and provide a better life for their children. Before, many families might have thought these types of goals to be unattainable with only one income. With a dual income, their financial goals were on the fast track.
The participation rate for prime working-age women peaked in the late 1990’s at about 76% of women working. By then, the share of women going into the traditional fields of teaching, nursing, social work, and clerical work declined, and more women were becoming doctors, lawyers, managers, and professors. As women were advancing in the workplace, the gender pay gap was starting to become more and more evident.
Although women were working in the same industries as men, they weren’t always promoted equally. Within the financial services industry, only 86 women are promoted to manager for every 100 men. This gender gap was, and still is, a challenge for women who are just as qualified for positions as their male counterparts. Women, on average, live longer than men and need to be able to support themselves in a longer retirement. Even today, women are paid, on average 20% less than men. However, it is an opportunity for today’s corporations to eliminate that gender bias when they are making offers, deciding on salaries, and determining bonuses.
After many years of not having any control of their finances, why would women want to give that up? Many people associate marriage with combining everything, including finances. This was the norm back in the day, but nowadays it isn’t always an assumed thing. This decision will be different for each couple. There are so many different options when it comes to combining finances. Many couples want trust in their relationship, but also want control of the money they make. This is why many young couples are selecting a hybrid method of combing finances. They have separate accounts for smaller purchases, but if they want to spend over an allotted amount they discuss with each other before making a purchase.
Read More: Couples Combining Finances
Whether combining finances or not, it’s important for women to be saving for their own retirement. There are no joint retirement accounts and, therefore, if you want to open a retirement account you have to do so in your own name. When saving for retirement you can invest in your company’s 401k, or you can open an IRA or Roth IRA. It’s important for women to be saving for their retirement as early as possible. If you’re a woman who doesn’t work, keep track of your family’s finances. Make sure you’re asking your partner financial questions. Ask about their retirement savings, how much they’re saving, and if they’re making it a priority. Everyone should be saving for a financially stable retirement.
Women have advanced significantly in the workforce and in the control of their own finances. Previously, many women felt they needed to get married in order to be financially secure, however, today this is not the case for most women. Marriage is not necessary in order to attain financial stability and now a significant number of women are choosing not to marry. You can build your own financial future with financial planning. Marriage is not a part of the criteria for financial success. You can invest, budget, and payoff debt on your own.
Women are creating the future of finance by setting the stage for their children to be financially successful. The more women know about finances, the more they’re able to pass on to their children. Earlier generations of women were not involved in the financial wellbeing of their family, which meant they didn’t have the financial literacy to pass on to their children. Now, women are working and they are in charge of their own finances. They’re able to not only educate their children about finances, but they’re also setting an example that women can work and be amazing mothers. As the years go on, women are becoming more confident financially and are paving the way for future women to be even more financially successful.
Katherine Fatta is the Social Media Coordinator at Navicore Solutions. She creates fun and informative social media posts that engage the public. She’s also the host of Navicore’s podcast, ‘Millennial Debt Domination.’ You can listen to our podcast here.