Why financial freedom is so important for women – and four ways to protect it

How much control do you have over your money? Find out why financial freedom is so important for women, and four ways you can protect it in a relationship.

Today – at least in many countries around the world – it’s the norm for women to earn their own money and become financially independent after leaving education. But what happens once we marry or commit to a long term relationship?

While you may have a successful, rewarding career when you marry, and perhaps even own your own home, it’s common for couples to combine their finances once they wed. And if you decide to have children, it’s far more likely that it’s the mother who sacrifices her career.

Trethowans
Trethowans

Indeed, a survey by the Institute of Fiscal Studies discovered that:

  • The average employment and hours of work of fathers barely changes, while the employment of women falls from above 90% to below 75% after childbirth.
  • The wages per hour stagnates for working mothers, but continues to grow uninterrupted for fathers.
  • Even if women earn more than their male partners before having children, their employment falls by at least 13% during the first years of parenthood and remains at this level for the next decade. 

So it’s easy to see how many women become more financially dependent (or even completely dependent) on their partner after having children. According to YouGov data, over a third of women in a couple are financially dependent on their partner, compared to just 11% of men.

On a simple level, this means that women have less say in how money can be spent. For example, they may feel guilt (or be unable to) order product with package tracking when they like. Instead, they may have to get permission from their partner before spending money.

But on a deeper level this has a significant impact on the life of a woman. She may feel unable to leave an unhappy relationship or marriage – maybe even an abusive relationship – because of lack of financial options.

And if she does leave, or is left by her partner, she can find that she is unable to get a mortgage or even rent a home, and doesn’t have enough money to cover her expenses. And too few women in relationships have made financial provision for their old age, including paying into a pension.

Four ways you can protect your financial freedom

So what’s the answer? We believe strongly that whatever your current romantic and financial position, it’s important for women to take control of their financial independence now and, very importantly, have their own financial plan for their old age.

If you are in a happy relationship of course we hope that remains a long and happy relationship and you enjoy financial security in it. But what if it doesn’t last? None of us can foresee the future and it’s always wise to have a backup plan, to ensure that whatever happens to you you are financially secure.

So how can you protect your financial independence in a relationship? Here are four quick suggestions.

1) Don’t combine your finances

Keep your own separate bank account. Yes, you may decide as a couple to open a joint bank account, but it’s still important to keep your own account for financial independence. This ensures you have money you can spent on whatever you like, without needing to ask permission, justify the purchase or feel any guilt. It also means that, if your relationships breaks down, your partner can’t siphon money out of the account.

If you have any investments before you marry, keep those too. This will ensure that you have a pot of cash ready in case anything goes wrong.

2) Make sure your name is on any joint assets

If you buy a home as a couple, make sure your name is on any documentation relating it it, including the mortgage if you pay into it. Otherwise, if you split you may find that you have no right to assets that you have financially contributed to, and can’t even speak to your mortgage provider, despite having paid into it.

At the very least, if you are married it is imperative that you register your matrimonial home rights. When you do, your home rights will be on the legal documents for your home, organisations such as the Land Registry and banks, and people who may want to buy your home will know that you have home rights. So your husband or wife can’t sell or re-mortgage your home without your knowledge.

3) Keep working

It’s not uncommon (as we see from the statistics above) for women to stop working once they have children. But this leaves you incredibly financially vulnerable.

We know of women who have been forced to remain in an unhappy marriage because they had stopped working and could not get a new job to provide for themselves if they left their husband. And women who couldn’t secure a mortgage to buy their own home after getting divorced because they had given up their career many years ago.

By remaining in work (even if it’s part time) you earn your own money, keep your skills fresh (one friend was told she was ‘no longer relevant’ after trying to resume her career after a 10 year break) and ensure you have an ongoing financial track record if you need to borrow money or rent a property in future.

If working just isn’t viable with young children, are there other ways you can continue working? Can you go freelance or become a consultant (again, this can be done part time around your family)? Or what about starting a business from home?

4) Be financially aware

And finally, make sure that you are aware of your financial situation as a couple. Be part of the bill paying every month, and know what money is coming into your home, and going out. Make sure you are aware of any investments made with family money and never sign a document – however much you may love and trust your partner – without understanding what it is and doing your own due diligence.

If you feel reluctant to do this, just think how bad you’ll feel if you ever discover that your partner has lost all your money, or run up debts you are jointly liable for.

As incredible as this may sound, especially if you are madly in love with your partner, this has happened to too many women who never suspected it could. It also ensures that if you ever do split up, money that should rightfully be yours can’t be hidden from you.

You have a responsibility to look after yourself

This may seem unnecessary to you right now if you are newly in love and trust your partner 100%. And some of the scenarios we describe may feel like a million miles away from you.

But trust us, all the women who have found themselves in these situations once felt the same as you too. They loved and trusted their partners, and paid a heavy price for not ensuring their own financial independence.

We hope you’ll never need to have your financial freedom tested, but if you do, and you’ve followed the advice in this article you’ll be a lot better off. And be very grateful that you took steps to protect yourself. And if your relationship does last the distance – and we hope it does – you’ll have your own finances to contribute to a happier, wealthier future.