For centuries, traditional beliefs on gender roles dictated what a woman’s life looked like. A woman’s life revolved around staying at home cooking, cleaning, and raising children. A man’s job was to work outside, take care of the finances, and build. In present day, this traditional division of responsibility has faded as many women have entered the labour force. However, research indicates that traditional beliefs still have an influence on our lives. Many women who work take care of the household more compared to their partner and men manage financial planning of the household more compared to their partner.[1] To me, it is especially interesting that not all women are taught to become financially independent and to manage their own finances. Sometimes they even don’t have a say over the finances that they earn.[2] All the more reason to discuss why financial independence is important for every woman.

This is might be a good moment to reflect on what financial independence means to you, before you read further.

• How would you define financial independence?
• Do you consider yourself to be financially independent? Why?
• Do you think that it is necessary to be financially independent? Why?

What is financial independence?

Being financially independent goes a little deeper than just earning an income.

1. You have fully control over your own finances. (There is no interference of others).
2. You can support yourself financially. You earn an income through your job, savings, or investments. You do not rely on anyone as a source of income (not a partner, the government, or bank).
3. You have the knowledge to make informed decisions on savings, investments, and spending.  

When it comes to managing finances, women tend to rely on their husbands, brothers, or fathers to take the lead. In some cultures, it is normal that women give up their entire income to the family. This can include the husband’s family. They do not have control over the finances that they earn. Research suggests that women-headed households reinvest 90 percent of their income into their families, compared to 30-40 percent by men. [3] To put it briefly, when women earn an income and participate in decision-making: the whole family benefits.

Why is it important to be financially independent?

1. Let us not beat about the bush: life is uncertain. You can wait for prince charming to arrive and rely on his finances and his financial planning skills, but what are you going to do when something unexpected happens? There is no guarantee of a fairy-tale relationship (job loss, death, disease, or growing apart from your partner are all part of life).
2. Many women in abusive relationships where the man is the provider have decided to stay married, because of financial reasons especially when children are involved. Women who are financially independent take the step to divorce or threaten with a divorce if the partner is not stopping the abuse.[4] Whether in an abusive relationship or not, if your partner is the provider and you don’t have a source of income of your own, it makes it more difficult to make decisions for yourself. Some partners might even guilt-trip you for living off them.
3. If you have certain goals that you want to achieve, you need to have financial resources. By being financially independent, you have control over how much you save for what and when.
4. Women have a longer life expectancy compared to men. Many women live their retired lives alone. In the Netherlands, more men compared to women died due to covid-19. This shows that it is important to invest time in financial planning.

I cannot stress enough that it is important for all women – be it single, married, widowed, separated, or divorced to be financially independent. In this way, you have control over your own life. That is why I encourage you to read about investments, savings, managing inflow and outflow of money, and saving for retirement. Ask questions about finances, investments, savings, talk about it with your friends and family. By becoming financially literate, you can secure your future goals and enjoy life without worrying about money!

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[1] Horne, R. M., Johnson, M. D., Galambos, N. L., & Krahn, H. J. (2018). Time, money, or gender? Predictors of the division of household labour across life stages. Sex Roles, 78(11), 731-743.

[2] Kim, J., Gutter, M. S., & Spangler, T. (2017). Review of family financial decision making: Suggestions for future research and implications for financial education. Journal of Financial Counseling and Planning, 28(2), 253-267.

[3] IFC Jobs Study. Assessing private sector contributions to job creation and poverty reduction. Report, 2013.

[4] Nanhoe, A., Lunnemann, K., & Pels, T. V. M. (2013). Eer en partnergeweld onder Hindostanen.