Mary Quist-Newins, MBA, MSFS, CFP®, CLU®, ChFC®
Women and the History of Money - Surprising Facts You Need to Know
As a 30 plus year veteran in financial services, I have often been struck by how many women -- even the most affluent, accomplished, and educated -- are insecure about their finances. I say this as one who has counseled hundreds of clients, taught thousands of financial advisors, and conducted statistically valid research on women and money. It’s a wide-ranging problem recently affirmed by a Fidelity Investments Study that found fewer than one in three women (cutting across all income and age groups) felt confident in their financial planning knowledge and abilities.¹
Looking through the lens of history, a prevailing lack of confidence should come as no surprise. After all, it wasn't until the dawn of the 20th century that American women could own property in all 50 states. Women-owned-wealth at critical mass (i.e., more than one-third of privately held assets) is a relatively recent phenomenon in this country and cultural norms have been slow to catch up.
"Nothing in life is to be feared. Now is the time to understand more so that we can fear less."
Learning about the (appropriately termed) “history” of women and money is essential to understanding where we are today and shaping the outlook for the future. This perspective, along with building financial literacy, setting smart goals, being a role model and acting as an agent for positive change can improve the prognosis for women in the years to come.
Where We’ve Been
Entire encyclopedias could (and should) be written about the global history of women and money across the ages. It’s as complex a story as are the ebb and flow of civilizations. Distilling things down, below are some of the most cathartic and lasting milestones that have left deep imprints on American women and girls today.
For thousands of years and across much of the Ancient World, women had many of the same property rights as men. This meant that females were generally able to obtain, own and dispose of property without restriction in Roman, Egyptian, Hindustan, Jewish societies.
However (and this is big), most of these same societies favored men in instances of divorce. It was also common for inheritances to pass to male beneficiaries unless daughters were the only surviving heirs.² These traditions created a centuries-old legacy that was the financial ruin of countless women and children.
Beginning in the 12 Century A.D./B.C.E., the concept of “coverture” was established in English common law. Essentially, it boils down to the notion that a married couple is a single financial unit. That meant that married women could not own property or enjoy any of the rights associated with asset possession. On the other hand, spinsters and widows could own property (except when the widow’s deceased husband had a surviving male heir – remember Jane Austin’s, Sense and Sensibility? ).
Unless provisions were made prior to marriage, this generally meant that wives could not own property separate from their husbands, nor could they execute contracts or file lawsuits. Husbands had the sole right to use, sell and transfer assets acquired through marriage without spousal consent. Vast inequities were created as a result of coverture throughout much of the “New World.”
English common law and the principle of coverture strongly influenced early legislation in the United States. In some states, coverture was further interpreted to mean that married women were their husband’s property -- perhaps its most insidious and culturally significant impact.
The most damaging phrase in the language is: “It’s always been done this way.”
->Grace Hopper, U.S. Navy Rear Admiral
In 1848, the Women’s Property Act was passed in the state of New York which in effect invalidated the concept of coverture. Similar legislation went on to be adopted across the country. However, it was not until 1900 -- more than fifty years later -- that all states passed laws allowing women equal property ownership rights. That means that women-owned-wealth nationwide has only recently become a cultural, economic, and political force.
Throughout the 20th Century, the march of American women towards a level playing field has continued. Economic advancements came with the passage of important legislation for equal pay, equal credit opportunities, and equal access to education. Well known are the hallmarks of the 19th Amendment (1920 – women’s right to vote), The Equal Pay Act (1963 – pledging equity in wages for the same work regardless of sex, race, religion or country of birth), Title VII of the Civil Rights Act (1964 – outlawing employment discrimination on the basis of sex). Further strengthening the financial rights of women is the Lily Ledbetter Fair Pay Restoration Act (2009 – enabling victims (generally women) to file pay discrimination complaints with the government).
Less well acknowledged are the 1988 passage and significance of the Women’s Business Ownership Act, HR5050. This legislation paved the way for women business owners to gain meaningful progress towards entrepreneurial equity with their male counterparts.
About The Women's Business Ownership Act:
- Abolished state laws requiring women to get a male cosigner (including sons under the age 18) for business loans. [Astonishingly, that male cosigner could be under the age of 18 in some states.]
- Mandated that the Census Bureau count and report data for women-owned C-Corporations. [Why is this significant? Because if something is not measured, its relative value is virtually nil.]
- Provided for the launch of the Women’s Business Center (WBC) Program to support female entrepreneurs that boasts over 100 centers nationwide.
- Enabled the founding of the National Women’s Business Council – a think tank that informs the Executive and Legislative branches of the federal government on the status and progress of women business owners.
Since business ownership has long been an (if not the) essential driver of economic advancement and wealth creation, this and similar legislation is especially important. As a perspective, the Federal Reserve reports that in 2019, business ownership accounted for more than one-third of all family wealth in the United States.³
In summary, there can be no doubt that in just over 100 – 150 years, the advancement of female affluence has been nothing short of remarkable. However, significant gaps remain.
Where We Are
On the Bright Side
Female affluence is on this rise and growing rapidly. It is now estimated that women control roughly $11 TRILLION – or one-third of the nation’s privately-held wealth. Women-owned wealth is expected to escalate dramatically in the coming years as the Silent and Baby Boom generations go to their permanent homes. Their combined asset transfer to beneficiaries is projected to range between $30 to $68 TRILLION. ⁴
Women are also emerging as dominant forces in the BIG THREE DRIVERS OF WEALTH CREATION – education, entrepreneurialism, and earnings. Women outnumber men in those obtaining their bachelor's, master's, and doctorate degrees.⁵ ⁶ ⁷ The rate of female entrepreneurship is outpacing that of males. And, despite its almost imperceptible rate of change, the pay gap has narrowed (but remains unacceptably large).
On The Other Hand
While there is traction in asset ownership for some, women across all age groups are far more likely to be impoverished than are men. This is most tragically true for women over 65. Since females on average live longer and represent a substantially larger portion of the elderly population, it is estimated that nearly three in four Americans over the age of 65 living in poverty are female.
Women at All Ages More Likely to Be Poor
Impoverishment is often the result of combined financial risk factors (in addition to longevity) that women face at disproportionately higher rates than do men. These include greater incidences of caregiving (and taking time away from employment), disabling illnesses, singlehood, a lifetime of underearning male peers (and consequently under-saving), and financial illiteracy -- underscoring both the urgency and importance of comprehensive financial planning education.
These perils cut across all demographic groups among the female population. The cumulative effect is most acutely felt by women of color (especially African American, Native American, and Latina women) who are most vulnerable to experience all these risks in greater numbers.
It’s easy to look at these challenges as depressing and daunting. That’s why taking the long view provides helpful context. Recognizing just how much progress has been made -- in the grand scheme of things and in a relatively short period of time – partially soothes the pain of persistent and pernicious inequities. We have come a long way, still have a long way to go and can make change together.
"We may encounter many defeats, but we must not be defeated."
Where We’re Headed and What Can You Do
For some -- the outlook is bright. The wave of inheritances expected from previous generations along with increased earnings in high-paying professions and businesses, will yield unprecedented women-owned wealth. Tragically for others -- the lack of social mobility, equal opportunity and generational wealth will continue to obstruct their paths towards economic security. For all – women will continue to experience certain life risks mentioned above at higher rates than for men. This means that financial literacy, comprehensive planning, and engagement is necessary to improve financial capacity, regardless of economic status.
So, what can be done to improve economic security for American women in the decades to come? How do we help our daughters, ourselves and females in our communities gain a brighter financial future?
Translate Dreams to Goals
We can begin by translating our hopes, fears, and dreams into financial goals. Clarifying and documenting goals – whether personal or organizational -- are the first essential steps towards their achievement.
Studies show how writing goals down increases the probability of their achievement. For example, a recent study by the Dominican University of California found that participants who had documented goals were 42% more likely to accomplish them than those whose goals were unwritten. ⁸
Documented Goals Help:
- Increase motivation, focus attention and remain aware of our purpose
- Make the future more tangible when competing with the impulse for instant gratification
- Provide the basis for action plans and increased accountability,
Improve prioritization when multiple goals are competing for the very same resources
- Create a framework to monitor and measure our progress
If you are looking to solidify your personal financial goals, check out the FREE Moneyweave® Academy SMART Goals Workbook on our website. This valuable tool walks you through identifying, developing and prioritizing goals across the six areas of financial planning to give you a clear and holistic sense of direction.
"The future belongs to those who believe in the beauty of their dreams."
Live by Example
Women need to have and to be powerful, inspiring role models. Research reveals seeing someone to look up to and identify with is powerful in motivating change. One way to do this is to commit to increasing financial literacy – for yourself, for others like you, and for women at risk of poverty.
Starting with ourselves, it’s important to know that no one knows it all when it comes to money. There’s no shame, guilt, or judgment in this – it just is. If anyone tries to tell you differently, run in the other direction. After all, most of us didn’t learn about personal finance in school, so don’t beat yourself up about it. You don’t need to know it all, but you do need to know what you don’t know and how/where to find the answers. That’s what Moneyweave® Academy is all about.
We all have different levels of financial readiness – but no matter what yours is -- commit to understanding more and to teaching others. In other words, be actively engaged in both learning and transferring financial knowledge. Women have too often been passive, isolated, and silent about their finances – that needs to change. Think of what you can do to lift yourself and others in the process.
Each person must live their life as a model for others."
Come Together For Change
Never before has there been such a large population of educated, affluent, and influential women. Never before have digital technology platforms enabled broad awareness building, virtual learning, community networking, and philanthropic outreach. Never before has there been a critical mass of female-owned wealth that can be channeled into effecting meaningful change and to help the least among us. Think about how we might put all of these elements together as a force for good.
The outlook for women and money can be bright! We can make a difference in securing brighter futures for American women and girls. Become a champion for advancing female financial literacy and lifting women out of poverty. Seek and support nonprofits that focus on education and outreach.
"I cannot alone change the world, but I can cast a stone across the waters to create many ripples."
- Women and Investing Study in 2021, Fidelity Investments https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/FidelityInvestmentsWomen&InvestingStudy2021.pdf
- Women’s Rights and Their Money: A Timeline from Cleopatra to Lilly Ledbetter, McGee, Suzanne and Moore, Heidi, August 11, 2014, The Guardian, https//www.theguardian.com/money/us-money-blog/2014/aug/11/women-rights-money-timeline-history
- Small Business Facts: The Importance of Business Ownership to Wealth, The Small Business Administration, Office of Advocacy, August 17. 2021. https://advocacy.sba.gov/2021/08/17/small-business-facts-the-importance-of-business-ownership-to-wealth/
- Women as the Next Wave of Growth in the U.S. Wealth Management, Baghai, Howard, Prakash, Zucker, July 29, 2020, McKinsey and Company, https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management
- Women Increasingly Outnumber Men in U.S. Colleges, Georgetown University, September 10, 2021, https://feed.georgetown.edu/access-affordability/women-increasingly-outnumber-men-at-u-s-colleges-but-why/
- Number of Master’s Degrees Earned in United States, Statistica. Accessed 2.24.22 https://www.statista.com/statistics/185160/number-of-masters-degrees-by-gender-since-1950/#:~:text=In%20the%20academic%20year%20of,students%20earned%20a%20Master's%20degree.
- Women Earned the Majority of Doctoral Degrees in 2020, American Enterprise Institute, Perry, Mark, Senior Fellow, October 14, 2020
- "Study Focuses on Strategies for Achieving Goals, Resolutions" Gardner, Sarah and Albee, Dave, 2015 Press Release. https://scholar.dominican.edu/news-releases/266