3 ways women can better understand their money
Are women any different from men in terms of money matters? To answer this question, let’s take a look at some financial facts:
- On average, women have $231,000 in superannuation when they retire, compared to about $454,000 for men 1.
- Only 65% of women aged 20-74 are in some form of paid employment 2.
- Over 60% of those employed who have young children work part-time 3.
- Those women who do work full-time and have children also spend over 44 hours on average on household duties 4.
- Almost a third of women also have some caring obligations for their parents 5.
- Only 11% of women are confident that they can finance their retirement 6.
Of course, some of these issues can apply to anyone, regardless of gender. But why are they so acute for women?
The unique influences on women’s financial situations
Some of the major issues that impact women’s finances are:
- Time spent out of the workforce (such as having a family) that impacts their earnings and savings
- The fact that more women work part-time rather than full-time
- Caring obligations for family taking focus away from women’s personal and financial matters
It’s little wonder that when they retire, women on average have far less superannuation and savings to fund their retirement than men do. And when you consider that women can now expect to live for over 84 years on average (a figure which is increasing every year) compared to 82 for men, it means that women are having to live longer, on less money.
Clearly, it’s crucial that women have a plan in place for their fiscal future.
What can women do to improve their financial future?
Firstly, it’s important to remember that regardless of your age or financial situation, things can change for the better. And like many things in life, the small changes often do make all the difference.
1) Have a plan for your finances
Thinking about your money matters beyond the day-to-day can be difficult, but it’s vital. Once your challenges are “on the table”, you can start to create a plan to do something about them.
Having a plan for the longer-term will help with things such as:
- Managing the mortgage
- Enjoying experiences with your family
- Getting in control of your budget
- Planning for changes in your personal situation
- Rewarding yourself, rather than just considering others
2) Build a savings buffer to help smooth out life’s ups and downs
The fact is that no-one is likely to have an “armchair ride” through life, with no problems or challenges to navigate their way through or plan for. Some of the likely hurdles you may have to overcome include:
- Changes in employment, including redundancy
- Future ill-health for yourself or your family
- Relationship changes such as separation or divorce.
As if these unfortunate events aren’t bad enough, all of them can be financially crippling too if you don’t have a savings buffer to see you through.
The great news is that there are many ways to build this safety cushion – you just need to make sure you think about them well before you need it!
3) Become familiar with your super
Making the right choices with your superannuation is such an important step. Super may seem like a daunting topic, but spending a little time understanding this important asset will pay dividends in the long-term.
Some key areas to review include:
- Which assets your super is invested in, and why
- Considering whether you should consolidate your super (if you have more than one fund) to save costs
- Whether you should pay a little more into your superannuation to access tax benefits and retirement upside
Calling all $avvy Women!
Improve your health, mind, and finances at our complimentary pre-Mother’s Day breakfast seminar on Friday 10 May 2019 from 7am
Hurry – seats are limited! See the details and secure your place today >
HM's financial advisers can help you plan for your future
If all of this seems a little daunting at first glance, rest assured that this feeling is entirely normal. Yet that isn’t a reason to put off looking after your finances!
Just like your children, your financial situation will flourish with a little love, care and attention. And seeing a professional for help with the areas you might need guidance with is a very sensible approach. Start now, seek advice, and gain control of your finances!
Arrange a complimentary no-obligation chat with an HM financial adviser by calling 07 3229 3688 or using the simple contact form here.1. Melbourne Institute, 2016
2. Australian Bureau of Statistics, 2016
3. Australian Bureau of Statistics, 2016
4. Melbourne Insititute, 2011
5. Melbourne Institute, 2016
6. The Sydney Community Foundation, 2018