April 17, 2021

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7 Financial Steps Women Should Take

8 min read

Monday marks International Women’s Day, a day to celebrate women’s achievements and raise awareness about gender equality.

It’s also a time to acknowledge just how financially far behind women, including trans women, and non-binary people remain when compared to their male counterparts. Women on average make only $0.82 for every dollar a man makes, but when broken down the wage gap reveals additional complexities relating to race, education and other socioeconomic factors.

On average, for every dollar made by white men, white women make roughly $0.79, Black women make $0.63, Hispanic and/or Latinx women make $0.55, Asian women make $0.87, Native Hawaiian or Other Pacific Islander women make $0.62 and American Indian or Alaska Native women make $0.58, according to recent data from American Association of University Women.

For trans women, wage disparity is also obvious. The D.C.-based non-profit Center for American Progress highlights one study that found female transgender workers’ earnings dropped by nearly one-third following their gender transitions.

And when it comes to saving for the future, women’s average total retirement savings is just $23,000, whereas men’s average total retirement savings is over three times higher at $76,000.

While barriers still remain, it’s important that you know how you can protect yourself and make sure you are financially secure going forward.

Below, Leslie Tayne, a debt-relief attorney at Tayne Law Group, shares seven steps every woman can take today to become more familiar with their finances and improve their relationships with money.

1. Be involved with your finances

The more intimately you know your finances, the better. Make a habit of reviewing your accounts daily or weekly so you know what money is coming in and going out. Tayne suggests checking all your accounts online (or through your bank apps), including checking and savings.

“Doing so ensures your money is secure, payments are clearing and bills are being paid,” Tayne says. “This will also help you familiarize yourself with your spending habits, who your creditors are and your bank balances.”

Set a reminder on your phone or through your bank’s app so you never get out of habit. You may also want to also consider a budgeting or expense tracker app that links to your bank accounts, categorizes your expenses for you and alerts you when you overspend. We rated Mint as the best overall free app since it performs all the above functions, plus more.

Sharing finances with someone? Don’t give up your share of control, says Tayne. If you’re not sure where to start, speak up and ask for help.

“It can be incredibly challenging for women who have devoted their lives exclusively to their home life (and aren’t involved in bill-paying) to know where to start,” Tayne says.

Even if your partner is the one who manages the bills, still check your shared bank accounts regularly and make sure you are establishing credit on your own (more on that in #5 below).

2. Establish a ‘do not touch’ savings account

3. Plan for the future

4. Set goals to ensure your financial security

5. Build credit

Having credit in your name is more important than just about any other financial move you could make, Tayne argues.

It can be difficult to feel financially secure when you don’t have credit. “If you have a thin file’ or little-to-no credit history, lenders will likely deny credit applications, as they cannot predict if you’ll default on the loan or make timely payments,” Tayne says.

Some 45 million Americans are credit invisible (without a credit record) or are considered “unscorable,” so you certainly aren’t alone if you don’t have credit.

The upside: it’s an easy fix, and we have some tips to get you started.

  • Become an authorized user on your partner or a relative’s existing credit card account. As an authorized user, you can piggyback off someone else’s good credit actions without being liable for any charges made on the card. Just make sure that the primary account holder responsibly manages their credit so you benefit from positive behaviors.
  • Open a secured credit card. Secured cards, such as the Discover it® Secured Credit Card, are a great option for beginners who are looking to establish credit. Secured cards differ from your traditional, or unsecured credit card, in that they require you to make a security deposit (typically $200) in order to receive a line of credit. Most secured cards will give you a clear path to upgrading to an unsecured card. With the Discover it Secured Credit Card, for example, Discover will automatically review your credit card account once you are eight months into using it to see if they can transition you to an unsecured line of credit and return your deposit.
  • Get credit for paying eligible bills. You don’t have to have a credit card to build credit. You can get credit for paying your monthly utility and cell phone bills on time thanks to Experian Boost™. The free service simply connects your bank account(s) to your Experian account to find qualifying on-time bill payments and add those payments to your credit file. Qualifying on-time payments include your phone, internet, cable, utility (gas, electricity, water) and streaming payments like Netflix®, HBO™, Hulu™, Disney+™ and Starz. According to its website, average users receiving a boost reported a 13-point increase in their FICO® Score.

Once you build a history of credit, you can then qualify for credit cards, loans and other financial products. Plus, with a good or excellent credit score (670 and above), you’ll receive the best interest rates and terms from lenders.

6. Minimize high-interest debt

7. Have a relationship with your creditors

Bottom line

While women continue to live through the gender pay gap, steps they can take to ensure their own financial security include knowing their finances, having savings, planning for the future, setting goals, building credit, minimizing high-interest debt and forming a bond with their bank of choice.

You don’t have to do it all at once, either. Start by taking a thorough review of what your finances look like (how much money you have in what accounts) and then prioritize the steps above as they pertain to you. Maybe you already have an emergency savings, but need to tackle your high-interest credit card balance. Perhaps you have no credit in your name, and if so, that’s a good place to start. Follow along steps above in order of importance to your own personal financial picture, and try to tackle each one a week.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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