Disclaimer:​ I have no financial affiliations to disclose. However, I do have a ridiculous amount of expenses to disclose. These include student loans, car insurance, health insurance, credit card payments, rent payments, gas, electricity, groceries, and so on. Also, this post is for informational purposes only. Please do not use this as tax, legal, or investment advice. Prior to making any decisions, please consult a professional.

The Fourth of July is fast approaching and storefronts are already filled with commemorative flags, barbecue gear, and fireworks. But what does The Declaration of Independence have to do with the financial independence of women? Let me explain.

In 1774, John Adams left home to fight in the Revolutionary War. He left his wife, Abigail Adams, in charge of all household finances while he was away. He asked Abigail to invest in farmland, find tenants for that land, and then manage those tenants. She refused to carry out his plan and chose to invest in government war bonds and securities instead. Her financial acumen paid off (literally). Over the next 10 years, she saw returns of over 400%. She used those returns to support not only her family, but also fellow women in her community.

As we all know, John Adams went on to sign The Declaration of Independence and later served as the second President. What most people do not know is that Abigail Adams paved the way for the financial independence of women as one of the first female investors in America. We have come a long way since the 1700s and for that I am grateful, but we still have a long way to go.

In the medical field specifically, financial empowerment is not emphasized as much as it should be. The majority of medical residents have very high amounts of debt and very low levels of financial literacy. This is frightening, especially for women. In general, women earn only 89 cents for every dollar men make. And because we shoulder more childcare and eldercare than our male counterparts, we ultimately spend 11 less years in the workforce. We also live longer. All of these factors make women 80% more likely to retire in poverty.

Scared yet? No need to be. Together we can tackle the various components of financial literacy.

First, let’s start with the basics of savings:

What is a checking account? C​hecking accounts are exactly what they sound like. They are accounts used to make payments with personal checks or debit transactions and maybe the occasional cash withdrawal from an ATM. That’s about it. Checking accounts are not a place to save money because their interest rates are absolutely abysmal. Most banks offer interest rates around 0.01%. So if you are interested in saving larger amounts of money, consider opening a savings account instead.

What do you mean by interest rate?​ Think of an interest rate as the amount the bank pays you as a reward for storing your money with them. It is usually expressed as an annual percentage yield. So if you have $1000 in your checking account and your interest rate is 0.01%, you will earn 0.01% of $1000 (which is $0.10) in interest over 12 months.

So how much should I have in my checking account?​ Most recommend around one month of living expenses plus an extra buffer of two to four weeks. The buffer will help you avoid overdraft fees if you spend a bit more than usual or if you need some cash on hand quickly. Make sure you are meeting the minimum balance requirements set forth by the bank or you may face fees. There are ways to avoid minimum balance requirements. For example, many banks will waive balance requirements if you set up direct deposit.

Why should I open a savings account?​ Your extra money should not stay in your checking account. Your checking account is linked to bill payments, debit card transactions, and personal checks. The account information is therefore visible to numerous third parties. This poses a major security risk. Moreover, savings accounts usually offer much higher interest rates than checking accounts. The caveat is that federal regulations limit you to six monthly transactions per savings account, including transfers.

Do savings accounts have higher interest rates than checking accounts?​ Usually. Unfortunately, many make the mistake of opening savings accounts with low interest rates. There are plenty of banks that offer savings accounts with interest rates of 2.00% or even higher. Ally Bank and Discover Bank are both popular options on the market currently. Both have no maintenance fees, no minimum balance requirements, and offer user-friendly online banking. Reminder that this is not a sponsored post. However, if you are a representative of Ally or Discover and would like to sponsor me, please contact me. (Just kidding!)

So how much should I have in my savings account?​ Most say at least six months of living expenses. For example, let’s say you spend around $3,000 per month. Then, $18,000 is a reasonable amount to have in your savings account. Ultimately, this number can vary greatly from person to person. Again, make sure you are meeting the minimum balance requirement for the account if there is one.

That’s it for now, folks. If you are not sure how to channel your inner Abigail Adams and become financially empowered, stay tuned. This is the first of a series of posts that will discuss the basics of savings, retirement, investing, advising, and other topics. We will discuss the 401(k) and the Roth IRA in our next post: Retirement 101.


Holton, Woody. “Abigail Adams, Bond Speculator.” The William and Mary Quarterly, vol. 64, no. 4, pp. 821–838, Oct. 2007, JSTOR.

Ahmad, Fahd, et al. “An Assessment of Residents’ and Fellows’ Personal Finance Literacy: an Unmet Medical Education Need.” International Journal of Medical Education, vol. 8, pp. 192–204, 29 May 2017.

Graf, Nikki, et al. “Gender Pay Gap Has Narrowed, but Changed Little in Past Decade.” Pew Research Center, 9 Apr. 2018.

Kenneally, Kelly. “Women 80% More Likely to Be Impoverished in Retirement.” National Institute on Retirement Security, 1 Mar. 2016.

Burnette, Margarette. “Checking vs. Savings Accounts: The Difference & How to Choose.” NerdWallet, 1 Oct. 2018.