Five Things Women Can Do with Their Money During Women’s History Month

Less than 50 years ago, the world was a very different place for women than it is today.  

For example, prior to the passage of the Equal Credit Opportunity Act in 1974, a bank could simply refuse an unmarried woman credit. Or it could require a  married woman to have her husband cosign for a card before she’d qualify for one. Decades later, women have more financial opportunities than ever before. Women can work, save, manage debt, and retire, on their own. 

Women still face numerous financial challenges, such as the wage gap, where women earn 84% of what men do, disproportionate layoffs during the pandemic, and more. But they also have agency to improve their finances in ways that previous generations of women couldn’t have imagined. 

As we celebrate Women’s History Month, you can honor the women who fought for change, by working on your finances in five ways: 

#1 Budget for your savings goals

Take some time to think about what your short-term and long-term savings objectives are. Do you want to go back to school? Save for sending your kids to college? Travel for a year? Retire early? Once you’ve done that, see how you can incorporate those goals into your budget. You might want to reduce how much you spend on non-essentials, such as going out to dinner, and re-allocate some of your budget to saving for your goals. 

There are multiple kinds of budgets  you can use to monitor your spending and saving. Some examples include: the 50-30-20 budget, the zero-sum budget, and the envelope method.  

#2 Add to your emergency fund

Women are likely to say they have a harder time than men making ends meet, according to some studies.  Further, the fact that the pandemic has hit women harder financially means that they may be more vulnerable financially. An emergency fund is something you can lean on if you run into an unexpected hardship, like a layoff. 

“[Your emergency fund] might be $500 or $50,000, but that’s the first tool in your financial safety kit,” says Marie Thomasson, a certified financial planner and founder of Modern Assets, a financial planning firm for progressive women, based in Culver City, California. “Set a number that is meaningful to you, and do whatever it takes to have that money set aside for true emergencies.” 

#3 Plan for retirement 

Women also tend to fall behind men when it comes to retirement planning. A November 2019 survey by The Transamerica Center for Retirement Studies found that men and women begin saving for retirement around the same time, and with roughly the same target sum in mind. But, women may fall behind men in retirement planning because they may make less than men on average. The median estimated household retirement savings for women was only $23,000, compared to $76,000 for men.

It’s never too early to start saving for retirement. If your employer offers a retirement plan, such as a 401(k) or 403(b), consider opening one or increasing your regular contributions. Your employer might even match your contributions to your account, depending on their policy. You can also open a retirement account outside of your employer-provided one. Stash offers both Roth and Traditional individual retirement accounts (IRAs).

#4 Reflect on your career

This Women’s History Month, think about where you’d like to see yourself in a year, five years, and beyond. Then consider what steps you can take now to get yourself to those milestones. That might mean taking a course at a local college, applying for a new position, or asking for a raise or promotion. 

The majority of women ask for raises of $5,000 or less, according to a 2019 study. About the same number of men and women ask for raises of $5,000 to $10K, but men were reportedly more likely than women to ask for raises of $10,000 or more. Decide what you want to ask for, and prepare points for why you deserve that raise or promotion. And don’t lowball yourself. 

#5 Invest in yourself

Consider investing. While investing might seem like a male-dominated habit, women tend to be level-headed investors. One Stash survey found that men were 87% more likely than women, on average, to sell an investment, during a period of market turbulence. 

For investors who have stuck with investing for the long term, the average rate of historic “real” returns (or returns after inflation has been factored in) is 6% to 7%, after inflation. (Remember that past performance doesn’t guarantee future returns. All investing involves risk.) Investment apps and brokerages, like Stash, make it easy to start small. You can build a diversified portfolio of investments, such as stocks, bonds, and exchange-traded funds (ETFs), with the goal of building wealth over time. You might also be interested in robo-advising, which helps you invest with a hands-off approach. You can open a managed account through Stash’s Smart Portfolio, which gives you access to cryptocurrency exposure. 

If you don’t have a ton to start, you can open an account with Stash with as little as $5. With a Stash account, you can start investing, saving for retirement, and planning for your future.