May 23, 2024

Relationships

The path to the rights of ownership

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

The path to the rights of ownership


We’ve come a long way.


There was a time not too far off in US history where only men were considered legal citizens (and women could not own property in their name). In 1839, Mississippi was the first state that granted women the right to legally own property. In 1862, California allowed women to control money they personally deposited in an account they owned. For over a hundred years after that, each state independently decided the ability for women to control financial assets or to access loans.


In the 1960’s, there was finally federal approval for women to own bank accounts. Even then, banks and financial institutions could still require a man’s authorization to open the account, move funds, or access a line of credit. This often meant that women needed to bring their father, husband, or brother, or even male friend to the bank.


The modern era of financial institutions began in 1974 with the the Equal Opportunity act. For the first time in US history, banks and institutions could not discriminate on the basis of gender or marital status.


Despite that, many of today’s products are broken for couples looking to jointly make financial decisions. Products where only 1 person can see a couple’s spending; only 1 person can deposit into a joint account, only 1 person can see all a couple’s connected accounts…. the design of these products were made in a world we’ve grown out of.


The path to working as a team


But there’s still a long road ahead.


In 1972, husbands were the primary or sole earner in 85% of households; that’s improved dramatically to 55% in 2022 (source: Pew Research). Despite this growing equality in earning, only 19% of relationships reported working on long-term financial decisions together.


When couples work together on financial decisions, women agreed:

  • 94% felt more confident about their future

  • 93% felt there would be fewer mistakes

  • 91% felt less stressed

  • 95% felt more confident about their finances, if something happened to their spouse


When couples don’t work together, widows or divorcees said:

  • 74% discovered negative financial surprises

  • 76% wish they had been more involved


Despite all the many benefits of working together (and the many negatives of not working together), today’s products. still don’t make that easy. We still operate in a world defined by financial institutions that were built in a different world. It’s not surprising that they’ve struggled to keep up with the norms that today’s couples expect.


Note: unfortunately, past research studies only have statistics on heterosexual marriages at this time.

Today’s adults have new norms.


Today’s couples act differently:

  • Many manage money in a Yours/Mine/Ours approach: In a world where 80% of couples are dual-income and marriage is happening later than ever, couples are looking for a combination of independence and togetherness. Even with fully merged, the design of 401ks, IRAs, and 529cs inherently bake in an “under whose name” concept.

  • Merging finances are slow and steady: Today’s working generation grew up shadowed by parents who saw divorce levels peak at 50%+. A natural impact has been a more gradual transition to merging finances (instead of the prior norm of merging everything upon marriage). Today’s couples begin opening joint accounts after marriage, but often begin merging more of their assets after becoming parents. It was more common to merge everything upon marriage, for older generations.

  • Today’s couples increasingly work together: couples are increasingly sharing the load of raising a family, earning an income, maintaining their home environment, and managing their money.


And today’s adults have evolved.

  • They’re movers and shakers: 40% of millennials and Gen Z no longer live in their hometown. While Boomers have averaged 8 years per company, younger generations now average 3 years (and with the shorter timeframes, come a trail of 401ks).

  • They have accounts strewn everywhere: Couples nowadays commonly have 15-25 accounts between them strewn across fintech companies and legacy financial institutions; that’s 2-3x more than what Boomers typically have.

  • They’re digital-first: 90%+ of millennials use digital banking and financial products vs. 45% of baby boomers.


Sources:

  • Time, "Joint Bank Accounts: Complete Guide 2024", published on January 31, 2024 (https://time.com/personal-finance/article/joint-bank-accounts-guide/#time-stamp-joint-bank-accounts-can-help-married-couples-and-others-share-expenses)

  • Forbes, "When could women open a bank account?", published on March 20, 2023 (https://www.forbes.com/advisor/banking/when-could-women-open-a-bank-account/)

  • One Advisory Partners, "The History of Women and Money in the United States in Honor of Women’s History Month", published May 7, (https://www.oneadvisorypartners.com/blog/the-history-of-women-and-money-in-the-united-states-in-honor-of-womens-history-month)

  • The Guardian, August 11, 2014, "Women's rights and their money: a timeline from Cleopatra to Lilly Ledbetter", (https://www.theguardian.com/money/us-money-blog/2014/aug/11/women-rights-money-timeline-history)

  • Spiral, "When Could Women Have a Bank Account? A Short History of Financial Gender Equality and the Financial Road Ahead", April 22, 2021, (https://www.spiral.us/blog/when-could-women-have-a-bank-account-a-short-history-of-financial-gender-equality-and-the-financial-road-ahead)

  • Pew Research Center, "In a Growing Share of U.S. Marriages, Husbands and Wives Earn About the Same", April 13, 2023, (https://www.pewresearch.org/social-trends/2023/04/13/in-a-growing-share-of-u-s-marriages-husbands-and-wives-earn-about-the-same/)

  • UBS, Own Your Worth, 2019

  • M Report, "More and More Millennials, Gen Zers Staying Close to Home", December 20, 2023, (https://themreport.com/news/data/12-20-2023/young-americans-living-home)

  • LHH, "Why temping baffles boomers and benefits Gen Z", May 11, 2023, (https://www.lhh.com/us/en/insights/why-temping-baffles-boomers-and-benefits-gen-z/)

  • MX, "Handling the Generation Gap in Banking: Baby Boomers", January 23, 2015, (https://www.mx.com/blog/handling-the-generation-gap-in-banking-part-i/)

  • CNBC, "Millennials and Gen Z are the most likely to use mobile banking apps—here’s why, plus budgeting tips", May 13, 2024, (https://www.cnbc.com/select/why-millennials-gen-z-use-mobile-banking-apps/)

AUTHOR

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

Emily is the ceo and cofounder of Plenty. Started by a husband and wife team, Plenty is a wealth platform built for modern couples to invest and plan towards their future, together. Previously, she was VP of Strategy and Operations at Even (acquired by Walmart/One) and a founding team member of Stripe's Growth and Finance & Strategy teams. She began her career as a VC, and was one of the youngest nationally to complete her CPA, CA and CFA designations.

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