As we celebrate Women’s History Month and International Women’s Day in March, it seems appropriate to reflect on the progress women have made over the past century in the US, but to also acknowledge that work remains to be done on the journey to the financial empowerment of women.
First, a quick review of several important dates that laid the groundwork for the financial progress women have made since our country’s founding:
- 1862: US Homestead Act: For the first time, women were allowed to own land in their own names, providing access to an important wealth-building asset.
- 1920: 19th Amendment: Gave women the right to vote, including on matters related to whether they should work and how much they could earn.
- 1963: Equal Pay Act: Equal pay for equal jobs, regardless of gender. This set the stage for more equal pay, though more progress needs to be made in narrowing the gender pay gap.
- 1974: Equal Credit Opportunity Act: Allowed women to obtain credit in their own names, without a male co-signer. This allowed many women to pursue their entrepreneurial dreams, not to mention buy homes on their own.
While women have made great progress since 1862, work remains to be done. Women still don’t earn as much as men. In 2021, according to the U.S. Government Accountability Office, women earned an estimated 82 cents for every dollar that men earned. They are also underrepresented in senior corporate and government positions of power. Here are some actions women can take to increase their financial empowerment:
- Get smart about money. Knowledge is power. One of the best things women can do to become more financially confident is to learn more about personal finances and investing. One of our favorite books on this topic is The Elements of Investing by Charles Ellis. Another is How to Money by Jean Chatzky. There are also many resources online.
- Invest, don’t just save. Many women are good savers, but end up leaving money earmarked for long-term goals in low-interest savings accounts. The result is their money is not working as hard as it could to help them achieve their goals and it is losing money to inflation every day. Women need to get comfortable investing money for long-term goals. It doesn’t need to be highly speculative Bitcoin or meme stocks, but can be in low-cost, well-diversified index funds. Investing is riskier than just leaving money in savings, but most of us need to accept some risk to earn higher returns to achieve our goals.
- Nurture your human capital. Women often do a poor job of negotiating for things they need and deserve, like higher pay or more senior roles. Particularly while we are younger, our human capital is one of our most valuable assets. It’s critical that we do all we can to nurture our earnings power and career potential. There are many things we can do to get what we deserve, whether it’s taking a negotiating class, working with a career coach, or taking classes to improve our skill set. The important part is to be proactive about taking the steps necessary to preserve and grow our human capital.
As we celebrate all the progress that women have made around the world in areas as diverse as education, health, safety, and business, let us make sure we are doing everything in our power to become financially empowered women, for ourselves and our children.