ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, March 24, 1997 TAG: 9703250052
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
WOMEN enjoy financial empowerment undreamed of even 30 years ago, yet too many of them still do not take the steps needed for financial independence. Connie Kratzer, a specialist in family financial management for the Virginia Tech Cooperative Extension at Blacksburg, said even younger women act as if "some day my prince will come" to solve all of their money problems.
"Young women should start out and manage money as if they will never marry," Kratzer said. Then if Prince Charming should come along, he will be delighted to find he has a wife who can manage money.
And marriage is obviously not necessarily forever. One out of every three adults is not currently married, Kratzer said, and one out of every six adults in the United States is divorced.
Women outlive men by an average of seven years, she pointed out, and more than a million women become widows every year.
She estimated that 80 percent to 90 percent of women will be forced to take charge of their own finances at some point in their lives.
Women should learn to take responsibility for managing money whether they are married or single, she said.
One means of doing this is to have credit in your own name with a credit rating separate from that of your husband, she said, and then to handle the accounts responsibly. Kratzer said banks and stores that extend credit are usually willing to report a credit history separately for married couples.
When a woman is first employed, Kratzer said, she should begin to plan for her retirement. Know your retirement plan options at work and take advantage of them, she advised. Never assume that someone will simply take care of you in your old age.
If you get divorced, she said, look out for the financial interests of you and your children. Focus especially on the way retirement pensions will be allocated, she said, because many women work at jobs that lack pension benefits.
Don't let someone else take care of your financial responsibilities, Kratzer warned.
Ann Diamond, spokeswoman for the consumer financial education program at Citibank in New York, said many women who are alive today can remember a time when women were literally not allowed to be financially independent. They were the responsibility of their families or husbands.
"Living in recent times hasn't guaranteed a woman's control over her own finances," Diamond said. "As late as 1980, the U.S. Supreme Court struck down one state's law that gave the husband control over joint marital property.
"How can we be surprised that some women, no matter how successful, still do not assume responsibility for their own personal finances?" she said.
Diamond offered six basic "take charge" steps to help women overcome their "money management inertia."
First, she said, set your goals. Figure out what your short-term and long-term financial needs and goals should be. Are there any big purchases that you want to make and, if so, when? Are you preparing financially for your retirement?
Then you should take stock. Review your current financial situation. Do you have a savings plan? Are you comfortable with the amount of debt you're carrying? Can you afford to do and buy things that you need or want? Do you know the details of your health insurance coverage? Do you know where important documents, such as the deed to your house, are located?
Third, make plans. After reviewing your current situation and establishing future financial goals, think about how you will reach them. How much money do you need to save every month? Where can you cut back? What kinds of savings or investing plans will help you get there? Do you need to set up a better system of record-keeping to track your financial situation?
After that, you must establish credit. This is a critical step for establishing a financial identity. Your credit history is an important factor when you apply for car loans, mortgages and business loans. Set up your own checking account, and apply for one of two credit cards in your name. A responsible spending and payment pattern will give you access to credit that can help you to achieve larger financial goals down the road.
Fifth, educate yourself. Diamond said newspapers and magazines carry more personal finance information than they did in the past. Plenty of free literature is available at banks and other financial services firms. So get out there and start reading.
Finally, she said, you should stay motivated. During the first months, Diamond said, the steps can be a difficult challenge, but the situation will improve as you experience the rewards of financial planning.
Citibank offers a free booklet, "Money Matters for Women," that provides basic advice on investment strategies. You can order a copy by calling (800)669-2635.
LENGTH: Medium: 88 lines ILLUSTRATION: GRAPHIC: color graphicby CNB