Women have come a long way when it comes to finances. It wasn’t really that long ago that everything a woman “owned” was in her husband’s name. Even single women had a difficult time establishing credit without the presence of a man just a few decades ago.
Banks could refuse women a credit card until the Equal Credit Opportunity Act of 1974 was signed into law. Prior to that, a bank could refuse to issue a credit card to an unmarried woman, and if a woman was married, her husband was required to cosign.
Many banks required single, divorced or widowed women to bring a man with them to cosign for a credit card, according to CNN, and some discounted the wages of women by as much as 50% when calculating their credit card limits, according to an article from Smithsonian Magazine. (Source)
But while we’ve made strides when it comes to money, it’s important that we don’t become complacent – especially when it comes to blending relationships and finances.
Should You Mix Your Money?
Of course, no one wants to think about the end of the relationship at the beginning – and maybe it won’t happen! But I’ve never had a client who has regretted being prepared.
Establish Your Own Credit
You need credit to do just about anything financial and a credit card is the easiest way to establish it. Even if you don’t really use the credit card, it’s important to have it in your own name. Some wives think they have credit because they share a card with their husband. That’s not the case. They’re likely listed as an “authorized user” which is not the same thing.
Be Prepared for the Unthinkable.
Unfortunately, situations can change dramatically and quickly. An unexpected divorce or death could put you in a position of needing your own accounts and not a lot of time to build a credit history.
It Just Might Make You Feel Better
One of the biggest fights couples have is over money. I have found that some of this can be eliminated by each person having some of their own money to spend each month, no questions asked. An amount needs to be agreed upon ahead of time, but each spouse has their own account with spending money in it. It can be very disempowering to have to run every single financial decision by your husband.
How Can You Establish Credit with No Income?
It might surprise you to know that there are very intelligent women out there who are money savvy…and have no credit established in their name. That’s because it’s not as easy as it used to be to get started.
If you’ve been the caretake of your family for years, you might fall into that category. Here’s what I suggest:
- Even if you don’t have your own income, you may still qualify for a low-limit credit card. If you don’t, get a secured credit card. This is a card backed by a cash deposit you make in advance. After you’ve made on-time payments each month for a certain amount of time, you should be able to upgrade to a regular card.
- You can build credit using your monthly rent payment. (CLICK HERE for more about rent reporting services.)
- Explore a credit-builder loan from a local credit union. These “loans” don’t actually give you access to the money until you’ve “paid” the loan back. You’ve now accumulated savings, and the credit union has reported your on-time payments to the credit reporting services, helping you build credit.
Final Thoughts on This
Whether or not to have joint accounts is really up to the individual couple, but either way it’s important to communicate and come to a mutual agreement at the very beginning about how to combine assets and how finances will be handled.
However, as a professional in the financial industry, I’ve never met a woman who has said, “Gee, I wish I hadn’t kept some of my own accounts.” But many women wish they hadn’t combined everything.
No matter what, it’s important that you establish some financial control in your own name, even if you’re happily together for 70 years. Doing this will not only make you feel more prepared, it might also strengthen your relationship.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
