Women then.

It blows my mind that I was alive during a time when women could not get credit without a man. That means women couldn’t buy a home, a car, or open a credit card account by themselves. It wasn’t until 1974, when the Equal Credit Opportunity Act came into being that women gained the ability to build their own credit.  Prior to 1974, a bank could refuse to issue a credit card to an unmarried woman, and if a woman was married, her husband was required to cosign. If divorced or widowed, women still had to bring a man in to co-sign and often the bank gave women 50% less credit then men.

How are women doing now?

When I realized that not even 50 years have passed since the 1974 act went into effect, I thought, no wonder many of us lack the confidence to manage our own money. For decades we were forced to rely on the help of a man.  

How are we doing now? In a 2018 study, according to wealth management firm UBS, “56% of married women leave long-term financial and investment decisions to their husbands, and 85% of those women do so because they believe their husbands know more about money matters.” Surprisingly, the stats were the same for millennial women ages 20-34.  56% of married women millennials defer investment decisions to their spouse. [i] 

We have made some progress since 1974 but still over half of married women defer to their spouse because they think they know more about money.  Money decisions need to be made by both partners. Women, you are giving over your power to men when you ignore financial matters. If you are reading this, it’s because you want to learn.  You want to take the lead on your finances.

Five accounts to help you achieve financial independence:

1. Emergency Savings Account.

Open a savings account. Label this account your Emergency Fund.  Begin by saving at least 6 months of your current income. Once you have fully funded your emergency savings, you will be better equipped to financially manage any unexpected circumstances

2. Mint or YNAB account. 

The most control you have over your money is with your spending!  Mint or YNAB can easily track how much you spend each month and help you create a budget. 

3. Join your Employer’s Retirement plan.  

Learn if the plan has an employer match and contribute at least enough to get the match. Learn about the different investment options and where to invest your contribution so that you create as much tax-deferred growth as possible. If your employer does not have a retirement plan-lobby for one! 

4. Roth IRA or Regular IRA. 

Open your IRA account at a discount brokerage firm like TD Ameritrade or Fidelity. Ideally, you do not touch this account until you are retired.  Each year you can contribute up to $6000 a year ($7000 if over 50). Invest a majority of this money in the stock market (index funds) if you have seven or more years until retirement.  Do not leave your contributions in cash!  You want growth!

5. If eligible, a Health Savings Account (HSA).

This is a hidden gem of a savings account.  In a nutshell, an HSA is an account designed to work together with an HSA-eligible high-deductible health plan (HDHP). You pay your medical expenses with this account and the money you don’t use you roll over to next year and you may choose to invest part of your savings for future medical expenses. This account is full of possible tax advantages: tax deductions, tax-free growth, and no federal taxes if the money is used for qualified medical expenses. The max you can put in an HSA is $3,650 for self coverage and $7,300 for family coverage.

If you need help, find a financial advisor you trust to help you set up your accounts and choose your investments.  You do not need to be wealthy to work with a financial advisor.  Just make sure they are fiduciary and fee-only. Your future financial freedom is worth it!

[i] https://www.ubs.com/global/en/media/display-page-ndp/en-20190306-study-reveals-multi-generational-problem.htm

Marathon Wealth Management, LLC is an Investment Advisor registered with the State of Washington. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or the completeness of, any description of securities, markets or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions.