Increasing numbers of women are shaping their own financial futures

Over the past decade, the role of women in financial decision-making has changed significantly both in Estonia and elsewhere in Europe. While until recently the primary applicant for a home loan was usually a man, banks today see a different picture. Approximately 30% of LHV home loans are now taken out by women alone, pointing to a clear shift in how women plan their economic future.

‘In our assessment, this shows that women are increasingly taking responsibility for their own economic future,’ says Annika Goroško, the Head of Retail Banking at LHV. According to her, this indicates a growth in both independence and confidence, reflecting a broader change in attitudes towards financial matters.

Security is the new priority

For many women, financial independence does not mean quick returns or a high appetite for risk, but above all, stability. This is also confirmed by saving habits. Over the past year, the most popular goal for saving in Estonia has become a ‘peace of mind’ fund, i.e. a financial buffer for unexpected situations. More than 10,000 LHV clients, for instance, have set this goal for themselves, and women under 30 stand out particularly in this regard.

‘While previously people tended to save for travel or larger purchases, the shift has now moved towards a sense of security, followed by the aforementioned needs,’ explains Goroško, who notes that this is especially important for families with children, where any unexpected expense can affect the coping of the entire household.

International studies confirm a similar shift. According to McKinsey data, 67% of women in Europe already feel confident in making financial decisions, compared to 45% five years ago. In the case of women, confidence is expressed not only in investing but also in loan decisions, risk assessment, and long-term planning. Increasingly, it is also seen in the growth of financial knowledge.

Borrowing together does not always mean equally shared assets

Although more and more women are taking out home loans alone, the most common model remains borrowing together with a partner. Unfortunately, it is precisely here that risks arise which are often not foreseen at the start of a relationship.

‘Taking out a loan does not automatically imply ownership,’ Goroško emphasises. ‘If a loan is in the names of two people, the bank generally expects the real estate to be registered in both names as well. This helps avoid situations where one party carries the liability but is left without any property rights.’

In practice, banks have also seen cases where the property is registered in the name of one partner while the other party contributes to monthly loan payments and covers a large portion of the family’s daily expenses. This is particularly risky in the case of cohabitation, where ownership relationships are not legally protected. In the event of a breakup, it may turn out that the financial contribution does not grant a legal right to the assets.

Therefore, banks recommend evaluating not only the interest rate and monthly payment before signing a loan agreement, but also negative life scenarios. Who owns the assets if the relationship ends? How is the contribution of both parties reflected? These questions do not indicate a lack of trust in the other person; rather, they are part of basic financial literacy. Prevention is always easier and cheaper than dealing with the consequences.

The pay and pension gap

Women’s financial decisions are often also influenced by demographic factors. According to statistics, women live longer on average than men, which means a longer pension period and the need to think about their financial security in the long term. When one adds Estonia’s gender pay gap – one of the largest in Europe – which will carry over into future pensions, as well as career breaks related to raising children, it is understandable why many women make rather calculated and cautious decisions concerning their finances. Therefore, it is important that major financial obligations, such as a home loan, remain affordable even when life does not go exactly according to plan.

Financial freedom does not start with utopian sums, a lottery win or an investment portfolio. Instead, this journey begins with a realistic assessment of one’s obligations and a conscious understanding of one’s opportunities, as well as the risks. This applies to both the present moment and the future.

Life changes that put the budget to the test

Starting a family and the birth of a child is one of life’s greatest changes. At a time when the entire way of life needs readjusting and a new rhythm is still forming, financial security becomes particularly vital. If financial matters are sorted out, there is one less major worry, and the family can focus on what truly matters – the new lifestyle and the child’s growth.

A practical question is how long one wishes to stay home with the child and how this fits with the parental benefit system. If one income temporarily decreases or disappears, for example, if one wishes to stay home with the child for longer, it can quickly be felt in the family budget. Therefore, it is worth thinking ahead about which expenses can be temporarily reduced or postponed and what options exist if income changes for a while.

‘Many people do not know that in Estonia, for example, LHV offers the possibility of taking a payment holiday on favourable terms specifically when one wishes to stay home with the child for longer,’ Goroško explains. Such a solution gives the family temporary breathing space and helps avoid a situation where a joyful life event brings about excessive financial strain.

Knowing about such possibilities even before signing a loan agreement is part of responsible financial behaviour. The question is not only about today’s solvency but also about whether the decisions made are sustainable.

In recent years, women’s financial behaviour has become more confident and well-considered. They save more purposefully, plan with a longer view, and take increasing responsibility for both their own and their children’s future. Investment is also increasingly in the hands of women themselves, but this often only follows once the foundation is in place. Real financial independence starts with awareness, not returns.