Op-ed: ‘RBG’ would certainly encourage women to take control of their finances – CNBC

Justice Ruth Bader Ginsburg speaks onstage at the Fourth Annual Berggruen Prize Gala in New York on Dec. 16, 2019.

Eugene Gologursky | Getty Images

Supreme Court Justice Ruth Bader Ginsburg was not only one of the most recognized leaders in the battle for gender equality, but also a voice advocating for women's financial literacy. To be sure, the late RBG was one of America's most respected feminist pioneers.

For more than 50 years, RBG worked to end sex and gender discrimination in U.S. law. First, as the founder of the ACLU Women's Rights Project in 1972, where she successfully argued five of the six cases before the Supreme Court, and then as only the second woman serving on the U.S. Supreme Court.

RBG taught the court that "a gender line helps to keep women not on a pedestal, but in a cage." In finances, the gender line that puts men in the driver's seat leaves women at a disadvantage and dangerously ill-informed about their money.

Historically, women have been more likely to take a back seat to men when it comes to money, and RBG fought to change this.

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RBG used her voice when she co-founded the Women's Rights Project, while focusing solely on gender and financial equality. Specifically, her work and fight, paved the path for the Equal Credit Opportunity Act of 1974. This act allowed women to have access to bank accounts, credit cards and mortgages without a male co-signer. RBG's legal work and many victories led to remarkable changes in financial independence for women.

Growing up, I saw how important financial strength and independence are for women. I watched as my own grandmother endured an abusive marriage, and I didn't understand why she never left. I finally dared to ask why she stayed, and Grandma shared that she felt financially trapped in her marriage.

It is not just my grandmother's generation that left the finances to men. According to a recent UBS study focusing on women's financial involvement in household finances, millennials exhibited less financial independence than baby boomer women. It seems that we are minting another generation of women who are not taking financial responsibility for themselves.

While RBG is no longer with us, there are several ground rules that we like to think she would agree that every adult woman should follow when it comes to managing her financial health.

At the top of this list, and most importantly is, never give someone complete control of your financial life. RBG knew that women must be involved in the money decisions for themselves. She fought tirelessly for women's equality and helped change laws so that women could open a bank account, credit card and mortgage in their name. These monumental steps forward helped women gain control of their own financial decisions.

Making sure women are involved in their finances is important now more than ever. In a 2016 study, researchers found that 9 out of 10 women will be the sole financial decision-maker of their household at some point in their lives.

Those who do not have hands-on experience managing their finances are at a massive disadvantage once the person handling their money is gone. These women face a steep learning curve once they are on their own, and find themselves at much greater risk of making costly financial mistakes.

To protect against this, women should review their finances monthly, so they have a clear understanding of where money is coming from and where it goes. Women should get access to log-in credentials for all accounts, allowing easy access to financial information.

Build an emergency fund of three to six months of living expenses to protect against any large surprise expenses. Women should also carefully track their spending and savings. Make sure you know precisely how your money is being made and spent.

If there is anything about your financial situation that you do not understand, seek the answers you need.

Financial education is lacking in our school systems, so finding alternative ways to educate yourself, to better your chances for financial success, is crucial. Some great avenues for expanding your knowledge around this are seeking a financial professional's guidance; reading relevant articles, books, and blogs; listening to podcasts; and utilizing apps that help you save, budget and invest.

For example, Savvy Ladies, a non-profit organization, is dedicated to empowering women through financial education. The group has hundreds of videos on critical financial topics and a free financial helpline for women.

Take a seat at the table. In earlier times, it was thought by some that women could not understand money and should not even try.

In reality, women tend to have the upper hand and are more successful at investing. A study by Fidelity found that female investors outperformed their male counterparts by 0.4% a year.

Another study from Warwick Business School found an even more significant performance gap between the two genders over three years. In this study, women's returns from investments outperformed those of men by 1.8%. At first glance, that might not seem like much, but it can have a significant impact over time.

Women's higher investment returns are not just mere luck. Women tend to invest for the long-term and stick with their plan, while men have a tendency to buy and sell stocks more frequently.

Women are inclined to be focused on the longer term and are more likely to ride out the stock market's ups and downs. They are less likely than men to sell during times of uncertainty, bypassing costly trading fees, taxes and market-timing investment mistakes.

In spite of their investing savvy, women still have one significant source of headwind: the investment confidence gap. Women often have less education and experience with investing in the stock market, and therefore invest more conservatively.

While there is nothing wrong with being conservative, it can have a downside leading to missed opportunities and putting women at risk of outliving their lifetime savings.

Ruth Bader Ginsburg can be credited with tearing down the web of laws that discouraged women's financial strength and independence. It is up to all of us to continue to carry the fight for economic equality forward.

Taking control of your finances is the first step towards this. It's is the key to personal freedom and security. Let us make RBG proud!

By Stacy Francis, CFP, president and CEO of Francis Financial

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Op-ed: 'RBG' would certainly encourage women to take control of their finances - CNBC