It's been more than 40 years since the Equal Credit Opportunity Act (ECOA) was passed, protecting women and other minorities from discrimination by creditors and banks. The main result of this landmark act? Access to credit cannot be denied on the basis of sex or race.
A lot has changed since then, and women's finances have made major strides. In fact, 42 percent of small businesses are owned by women in 2019--a fact worth celebrating as we enter National Women's Small Business Month this October.
But there's still more work to be done to help women in financial awareness and most importantly—long-term success.
If you want to overcome your debt, first you have to understand it. From student loans and medical bills, to credit card debt or car loans, debt can be a heavy burden to bear that keeps you from pursuing your dreams.
Think of checking your credit report like going to the doctor: you hope nothing's wrong, but when you discover a problem you get to work fixing it right away!
Here are some ways your credit report can help you better manage your finances.
Despite the opportunities that policies like the ECOA are meant to encourage for women and other marginalized groups, women still earn less than men. According to PEW, women earn 80% of what men earn on average.
When it comes to savings, that gap is amplified by compounding interest. And although some studies show that women have more success with investing, the main problem is that women just aren't investing enough. In 2018, NBC reported that women were investing 40 percent less than men. This means that that 20% pay gap is being amplified by lost interest on investments. Your dollar will go farther with low-cost investment funds than it would with a standard savings account or CD, according to recent data from the FDIC and Goldman Sachs.
So if you're only focusing on savings accounts, consider this your green light to start investing. If you have a 401k option available to you, an easy step to take is to max out your annual contributions.
Retirement doesn't have to be your own financial goal. Goal setting can help you visualize what exactly you hope to achieve, which in turn makes it easier to commit to changes in your money management. Just make sure that your goals are tangible. Think dollar amounts, timelines and success markers. Maybe you want to buy a new home in the next five years or start a brick and mortar business the year after next. Knowing your goals is an important first step for planning to achieve them.
You might have some goals in mind, or funds that you've heard family and friends talk about for investing. But actually taking action can feel overwhelming. Fortunately, a trusted banker can help you plan for your goals.
Choosing to work with a local bank means that your banker will understand where you're coming from. You can turn to your banker for advice on making a financial plan or investing options, or just to talk through some of your financial goals.
Women have come a long way in the world of small business and finances in the United States. But to get ahead in the game, it's important to develop a solid understanding of where you stand and where you want to go. With the right information and help at your side, your financial goals are well within reach. [cite::171::cite] [cite::172::cite]