A new study released on June 24 highlighted some troubling facts about the financial awareness and stability of today's American women. The research, conducted by Harris Interactive for the Lending Club, found that only 65% of women knew their credit score vs. 74% of men. What's more, only 72% knew the interest rates on their credit cards, compared to 84% of men.
"Even with reform in Washington, it's not enough," says Jennifer Openshaw, chief consumer adviser to Lending Club. "People need to take ownership of their money. Traditionally, men have handled the larger finances so women haven't gained that experience," Openshaw told Walletpop in a phone interview. As a result, Openshaw says, they're now vulnerable in the event of death or divorce.
"In the event of a divorce, a woman's standard of living will drop 15% while the man's will rise 10%, according to one Harvard study," Openshaw says. "Most women aren't aware of that fact." Another chilling statistic? The average age of widowhood is 57, according to Openshaw. "It's not just a wake-up call, it's a crisis alarm. I talk to women all the time who are hanging by a financial thread," she says.
Openshaw says women need to embrace their negotiating prowess to start off on a good financial footing. Women should ask for better interest rates and loan terms when dealing with a credit card issuer or other lender. Succeeding in these requests will improve financial stability. Think of the lending universe as more like a flea market than a big-box store; haggling is perfectly acceptable.
Next, women need to be aware of their partner's financial situation and work as a team when it comes to paying bills and making major financial decisions. Openshaw warns that handing over the financial reins can lead to unpleasant surprises if a spouse is delinquent paying the bills or runs up debt their spouse knows nothing about.
Finally, women should know their credit score. Too many don't think to ask when they're sitting in front of a lender, but it's a simple question that can lead to greater empowerment. "Most Americans will be forced at some point to be solely responsible for money," Openshaw points out. As it turns out, though, the key to financial security isn't money; it's knowledge and the willingness to speak up and demand the information and the treatment they deserve.
Intro to different retirement accounts
What does it mean to have a 401(k)? IRA?View Course »