Economic Abuse and the Importance of Financial Literacy For Women

Women around the world face unique challenges and obstacles when it comes to building wealth and assets and earning or saving money. In some parts of the world, women still have restricted access to higher education or employment. Worldwide, a huge number of women stay out of the workforce for raising kids and taking care of the family. Women have lower literacy and higher education rate in many countries. Women typically earn less money than men for the same type of job. More women than men work in unpaid, low-paying, and daily wage jobs and unorganized sectors, which makes it difficult for them to acquire assets.

 Read: The Burden of Unpaid Care on Women

On the other hand, when it comes to opening bank accounts, applying for credit cards, and inheriting or buying properties, all countries had (some still have) discriminatory laws and policies restricting women from gaining financial freedom. Women’s fight for financial independence gradually resulted in changes in these discriminatory laws in most countries. In the USA, it was not until 1974 that women could independently apply for a credit card. In Canada, until 1964, women could not open a Bank account without obtaining their husband’s signatures. Women in many Countries in MENA and South Asia still face legal barriers to owning and inheriting properties. According to World Economic Forum, globally more than 1 billion women are still financially excluded – they do not have a formal bank account. 

 Read: Why Many Women in India stay Away From The Workforce?

This systemic issue runs deep into patriarchal systems and institutions. Historically women have not participated in financial decision-making. This is due in part to the traditional social structure that designates men as the primary breadwinners and providers in most societies. As a result, women have been at a significant disadvantage regarding financial freedom. The financial literacy rate among women has also traditionally been very low. This makes them more vulnerable to economic abuse and exploitation, and results in a higher poverty rate among women. Women and girls are often victims of economic abuse by their male family members who control all the financial resources and make the major financial decisions. This can lead to severe economic hardship for women, particularly if they are left with no access to financial resources or huge debt. This post focuses on economic abuse and the importance of financial literacy for women.

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Economic abuse is a form of domestic violence in which one partner uses money and finances as a means to control, exploit, and abuse the other partner. It can involve withholding or restricting money, making financial decisions without the other partner’s input or knowledge, or using finances as a weapon to intimidate or threaten the other partner. More than 95% of domestic violence involves some form of economic abuse. 

While economic abuse may not result in physical injury, it can profoundly impact the victim’s emotional well-being and quality of life. Abusers often restrict the victims from building their assets, investments, employment, and financial independence. 

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Sometimes victims do not identify the signs of financial and economic abuse in a relationship until it is too late. The lack of financial literacy in women and the social conditioning about men being the controller and provider of the family make them norm more vulnerable to economic abuse. Some common forms of economic abuse are-

• Preventing the partner from getting an education or employment 
• Sabotaging  partner’s chances of  accomplishing financial freedom
• Denying access from bank accounts, investments, or assets
• Controlling or curtailing finance and household expenses 
• Withholding or hiding joint income 

Women who have a grasp of financial literacy are in a better position to protect their economic safety and recognize warning signs of financial and economic abuse. The ability to set healthy boundaries around joint finances and assets is critical for preventing this type of mistreatment, especially in the early stages of a relationship. Unfortunately, it is often unemployed women who are most vulnerable to this form of abuse, though many employed women still adhere to social norms that can limit financial autonomy.

Economic Independence is Key to the Empowerment of Women

The economic independence of women is an essential step in addressing the underlying power imbalance between men and women. Women who are economically empowered are more likely to be able to leave abusive relationships, access resources to support themselves and their children, and build a better future. Moreover, economically independent women can be role models and mentors for other women, helping to create a snowball effect of empowerment. Unfortunately, women are often not taught about finance, investment, credit, and the importance of sound financial decision-making. Encouraging women to understand finance has a long-term benefit on the overall empowerment of women and the growth of society. Financial literacy is a primary enabler for women to take control of their lives.

Read: Why Can’t Women Escape Abusive Relationships?

Financial literacy may not be the only solution to abuse and oppression against women. But, financial literacy plays critical for women in providing the skills and knowledge necessary to make sound financial decisions and help them achieve economic independence. Economic independence is an essential component of having control over one’s life and a wide range of choices. Women in an economically dependent relationships are often vulnerable to oppressive conditions, abuse, and violence. In addition, those without access to reliable financial resources may be unlikely to leave an abusive situation. Therefore women must have the necessary financial planning skills and knowledge to live empowered lives.

Financial education enables women to understand and manage their finances, including budgeting, saving, investing, and managing debt. It can also help them negotiate better salaries, plan for retirement, and start and run successful businesses. Financial literacy also helps women recognize and address warning signs of financial abuse. It can also help women access financial resources and services, such as loans and credit, and make informed decisions about financial products and services. Overall, financial literacy is essential for women’s economic and social empowerment and psychological well-being. By improving financial literacy among women, countries can help reduce poverty and inequality, promote gender equality, and enhance women’s economic opportunities and security. That said, it is very important to recognize that only financial literacy can not solely improve women’s social and economic status unless the systemic and institutional barriers to women’s financial inclusion are addressed by the policymakers. 

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Achieving financial literacy for women

I believe it is the responsibility of parents and schools to educate young children about finance. Parents should teach their girls about personal finances, investing and saving money, and using credit wisely from an early age.

Learning about personal finances is an excellent first step to take to improve financial literacy for young women. This can involve studying financial resources, attending financial workshops or classes, or even simply talking to friends or family members who are financially literate. 

it can be helpful for women to seek out professional financial advice from trusted sources. Fortunately, some several organizations and initiatives are working to improve financial literacy among women and educate them about informed financial decisions. These organizations are working to provide them with the skills and knowledge women need to make sound financial decisions. If you are interested in a proper financial education, connect with a local organization or individual who is professionally qualified to guide you through the process. 

Financial Literacy Organization For Women And Girls (FLOW) is a US-based non-profit organization focused on teaching financial literacy, asset building, and entrepreneurship to women. 

Annuity is an organization dedicated to educating people about their financial options and helping them make informed decisions. Check out their sources on Financial Literacy. 

Savvy Ladies has a blog dedicated to women’s financial education and financial decision-making. 

Proper financial planning and education can have far-reaching impacts on a woman’s life and can significantly improve her social and economic status. A financially independent woman is not only an asset to her family but also to her country. Women’s financial freedom is also essential in closing the gender power gap and gender-based discrimination and oppression. Both financial literacy and gender education must be included in the school curriculum. But, most importantly, countries should focus on addressing the gender economic gap through policy and social reforms.