Morgan Stanley
  • Wealth Management
  • Feb 28, 2022

Developing Your Own Financial Identity: A Guide for Women

Life can be unpredictable. One of the best ways to feel in control is to take an active role in your finances, which includes maintaining a unique financial identity. Learn more.

From establishing good credit to exploring investment opportunities, taking a proactive role in your financial life can be one of the keys to attaining your goals. This is true no matter your age, gender identity, or relationship status—but it’s especially important for women as they fully realize their economic power.

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When you’re in a relationship, it may be tempting to leave money-related decisions to your partner, whether out of convenience, inertia, or a lack of financial self-confidence. Doing so is common even in affluent households, where just a quarter of women say they are comfortable making investment and savings-related decisions on their own.1

But life doesn’t always go as planned, and many women who had previously shared financial responsibilities suddenly find themselves in the role of sole decision-maker. Regardless of their circumstances, women owe it to themselves to take ownership of their financial situation—and part of that includes creating a unique financial identity. Here are three ways to get started.

Establish a Credit History of Your Own

Whether you’re coupled up or living single, a strong credit history is an essential component of your financial health. Establishing credit might include using credit cards strategically, paying utility bills on time, and making regular payments against student loans and mortgages. Taken together, these activities are evaluated as a sign of your trustworthiness to lenders and expressed as your credit score. In turn, your credit score plays a major role in which financial opportunities, interest rates, and credit card rewards you can access.

It takes time to build up a positive credit history, and your credit score will evolve as you perform new financial actions, such as opening or closing accounts and taking out new loans or lines of credit. If you are currently married or plan to get married in the future, it’s important to continue taking credit-related actions in your name so that you don’t need to completely rebuild your credit history if you eventually become single again.

Weigh Joint Versus Separate Accounts

When couples unite in matrimony, many choose to unite their bank accounts as well. For some, this can simplify the management of shared expenses, increase transparency, and make funds easier to access in the event of an emergency. However, combining accounts can also lead to tension if one spouse has significantly different spending habits. In addition, spouses with joint accounts become tied to each other’s credit and debt history. Separate accounts, on the other hand, can give spouses a sense of financial autonomy, allowing them to continue to build individual credit. Then again, this strategy may make it harder to track and manage joint expenses and could potentially foster less transparency.

There are certainly pros and cons to both approaches, and every couple is different and will need to decide what makes sense for them. One happy medium may involve creating a joint account from which to pay bills and cover other shared costs, while also maintaining separate accounts for individual spending.

Be Part of the Conversation

Another part of establishing a financial identity is taking an active role in stewarding your family’s assets according to your values and objectives, including when engaging with financial professionals. When working with a Financial Advisor, both halves of a couple should be involved in setting goals, understanding potential investment strategies, and agreeing to any major decisions.

Throughout this process, be sure that you and your partner have openly discussed your retirement plan—including where your assets reside. Work to get on the same page about estate planning considerations and financial protections for your family, such as life insurance. And don’t forget the details, like usernames and passwords for online financial accounts. 

The Bottom Line

On your own or in a relationship, you can be the most empowered when you are an active participant in your present and future. Carving out a unique financial identity doesn’t mean you can’t ask for help or work collaboratively—rather, it’s about taking the initiative to dictate your financial life on your terms.