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Money Sense for Women - Taking an Active Role in Family Finance

February 11, 2009

By: Jim Oosterman
Melrose Bank

Women are more financially independent than ever before. According to the U.S. Department of Labor, women comprised 46% of the total workforce in 2007 with a record 68 million women employed. In addition, nearly three quarters of all mothers work. Whether a source of financial support for your family or not, it's important for women to be involved in and help to manage their family's finances. Gaining financial confidence is vital to making your money stretch the farthest it can go, not only in today’s economy but for years to come.

The good news is that there has been an increase of women playing an active role in making family money decisions. According to one set of statistics:

  • 62% of women manage the family's checking account;
  • 59% of women review the bills prior to paying them;
  • 58% of women actually pay the bills; and
  • 53% of women create the family's budget.

Aside from the day-to-day money issues, it’s also essential for women to take charge of their financial futures. Paying the bills and being aware of where the money goes is certainly part of overall financial literacy. But long-term financial planning should be of utmost importance. While the pay gap between men and women is narrowing, the reality is that on average, women still make about 25% less than men. In addition women are the gender more likely to take time off to raise children or care for elderly parents. As a result, women's individual social security benefits, savings accounts and retirement funds tend to be lower than men's. Add to that, the fact that as a group, women live longer than men. All of these factors can affect the big picture.

Smart decisions early on can make a big difference when it comes to retirement planning and ensuring that women faced with an unexpected change in circumstances can maintain their lifestyle or at least be prepared to manage whatever financial challenges they are faced with.

Gaining Financial Confidence
There are a few things women can do to feel more confident about their financial futures. If you aren’t already involved in your general household finances, start now. Educate yourself on the monthly bills and other monetary responsibilities in your household.

Once you have a good grasp of the household budget, you can start thinking about savings and investments. Married women should make sure they're aware of their spouse's financial arrangements and estate planning. They should take part in discussions about how best to invest money as a couple. Many spouses have different opinions on money matters, and it’s a good idea to put any conflicts to rest if you can. That means trying to agree on financial goals, levels of acceptable risk, and resolving any issues related to your shared debts or assets.

Maybe you and your spouse also have separate savings accounts or investments. Take the opportunity to learn more about the subject. Your community bank is a great resource for helping to sort out the options. Get a basic understanding of various types of investment vehicles available. Certificates of deposit can be a good option for saving over the long term, but you might also consider something more aggressive. A good financial advisor can help you decide what's best for you.

Working women should contribute as much as they can, as soon as they can, to an employer-based retirement savings plan – a 401(k) - or an Individual Retirement Account. Based on their individual situation, women age 50 and older who are starting their retirement savings late should consider making extra contributions.

Knowledge is Power
There's no denying that in some marriages and partnerships, one person acts as the family accountant, responsible for managing investments and budgets. Other couples periodically switch the responsibility back and forth, which helps both people understand their finances. But no matter how family finances are handled, both partners should have access to all joint accounts and records, understand all investments and be aware of all joint expenditures. Knowledge is the power to control your financial future.

James Oosterman is the Vice President of Melrose Bank. He can be reached by telephone 781-665-2500, online at or on Facebook at

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