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Celebrating Independence Day presents the perfect opportunity to consider what independence means for women today. Is it the freedom to build our lives as we see fit? The right to choose between being a stay-at-home mom or a careerwoman? The ability to travel abroad or finally take that dream vacation? Maybe today’s “independence” is the freedom to make choices—to fashion our lives in a way that reflects our dreams and aspirations. But these choices often come with “but”s, “maybe”s, and “if only”s that severely limit our options when money enters the picture.
As you watch the dazzling fireworks on July 4th, perhaps your thoughts will drift to the retirement account you still haven't opened. As you nibble on a hotdog, you might worry how charging that weekend beach trip will affect the credit card bill you’ll have to pay at the end of the month. As you wipe ice cream from your daughter’s laughing face, you may wonder how you'll save up enough money to put her through college. Now that we've secured the right to vote, to work, and to go to college, the final frontier is in many ways a financial one. After all, isn't a woman only truly independent when she’s financially free? Owning a house in your name isn’t so sweet when you're a slave to a monthly mortgage rate. The glow of obtaining a college degree dims when student debt saddles you with regular payments years later.
Financial independence isn’t only about making your own money. It’s about knowing how to save and spend that money in a way that makes sense for you, your future, and your family (if you choose to start one). If you’re scratching your head at whether to prioritize student loans or credit card debt, know that you are not alone. Just a few days ago, USA Today reported that between to 2011 and 2012, women became “disproportionately less likely than men to pay their credit card balance in full each month, have an emergency savings fund and have a general understanding of stocks, bonds and mutual funds.” These are women like you and me—women who are college-educated, hold steady jobs, and lead ordinary lives.
In Britain, the situation is equally challenging. In a recent survey conducted by the British government, nearly one in three women admitted to being stressed about money, and almost 40 percent of women reported difficulty discussing financial matters. A different kind of gap exists in Australia, where working women lag far behind men when it comes to retirement savings, according to the Australian Human Rights Commission. How can we expect to effect change on ongoing issues such as the pay gap if we can’t get a handle on our own pocketbooks?
Since women have some big financial fish to fry, we can at least do ourselves the service of becoming as financially savvy as men, if not more so. As July 4th approaches, take money matters into your own hands. Improving your knowledge of personal finance can be as simple as browsing the ABCs of money management on MyMoney.gov, the U.S. government’s resource for basic financial education—or maybe start with this quiz from Smith College’s Center for Women and Financial Independence to gauge how much you know about your money. Enjoy the holiday, but rest assured that hot dog will taste much better when you know what's in store after the fireworks end. Promise.
—Linda A. Thompson