I’ve always been passionate about encouraging women to take an interest in their money, rather than taking it for granted or surrendering the responsibility to a partner.
Having seen friends struggle to make ends meet when the unexpected happens, I know first-hand how important it is to have an independent understanding of finances. This is especially important as women face a unique set of challenges compared to their male counterparts.
To get the ball rolling, here are four key financial issues which women have to deal with and how to handle them.
#1. Less time in the workforce
Despite the introduction of the term ‘house husband’, when it comes to raising a family, women are most likely to stop work to take on the role of primary carer. It has a ripple affect through everything from the amount of superannuation at retirement and reduced opportunities for advancement.
This makes it incredibly important to sit down and build a financial plan as far in advance as possible if you’re thinking of starting a family.
Can you afford to live on one income plus cover all the additional costs babies bring? Are you insured in case something happens and your partner can’t work? Does your work have a maternity leave policy and have you satisfied the conditions to benefit from it?
The last thing you want to do when the baby arrives is worry about how to pay the bills.
And what about getting your partner sharing a greater load of the caring so the woman can maximise her career opportunities.
#2. Income inequality
According to the government’s Workplace Gender Equality Agency, the national gender pay gap is 17.1 per cent, with the average male taking home $1,532 a week compared to $1270 for females.
One common explanation is that women are notoriously less likely to ask their boss for a pay rise, whereas men are more comfortable having conversations about money.
So don’t get left behind. Make sure you understand the benchmark salary for similar roles and have regular performance conversations with your manager.
Check with recruitment consultants and online job search sites to asses your real market worth.
When discussing pay, be prepared and list the tangible reasons you deserve a pay increase, focusing on what you can bring to the business and what you’ve already achieved.
#3. Divorce hits harder
The median age for divorce for women in Australia is 38.5 years old.
At this age many women have been in and out of the workforce raising a family and could have lower earning potential as a result. In many cases, women will also take on primary responsibility for looking after the kids after a split.
To combat this, take the time to get on top of your family finances. Have regular and open conversations with your partner about money, and make sure to have a full understanding of the family’s financial position.
Not only will this help you manage money better, it will also be a huge help in the event the relationship ends.
#4. Living longer
On average, women live for approximately five years longer than men.
But on top of everything we’ve already mentioned, the average super pay out for women at retirement is 43 per cent lower than that of a man.
These two factors mean it’s crucial for women to take steps as early as possible to address the retirement savings gap.
Contributing extra to super through salary sacrificing, combining multiple super accounts and investing in appropriate assets will ensure you’re maximising your balance at retirement.