Jul 6, 2022
Women face a number of financial challenges ranging from the gender pay gap and lower lifetime earnings than men to an oversized share of labour in the home and parenting children. As a result, 80 per cent of women rate their financial well-being as moderate, low, or very low. The Financial Services Council's It Starts With Action campaign is working to help women improve their financial wellbeing and to develop strategies that address their biggest financial worries. As a Founding Champion of the campaign, we want to take a look at what those worries are and how women might begin to deal with them.
Women not only earn less over the course of their lifetimes than men do, but they also tend to live longer. This means that in order to maintain their lifestyle throughout their retirement, women would have to save more on average than men do. In the real world, it goes beyond just maintaining an ideal lifestyle - women who have spent their entire lives saving for retirement often still fear losing their financial independence in their old age.
The solution to this problem is to prioritise retirement savings and make a financial plan as soon as possible. Of course, that’s much more easily said than done. Finding sustainable ways to start saving enough and invest those savings appropriately, is hard. To build a financial plan that works - and that you can actually stick to when money is tight - usually requires you to also develop your financial literacy and lean on the expertise of professionals.
We all want the best for our children, but giving them the best possible start in life often comes with major costs. It’s natural to want to help with things like university fees, a deposit for a first home, or a car.
When it comes to helping out our children, we need to assess what we can afford to give, ideally with the help of a financial adviser who can determine exactly what is needed to maintain our own financial health. After that, our financial circumstances then need to be weighed against the needs of our kids, ideally by including them in the conversation and working with them to find the best possible solution.
Major life events can profoundly transform our circumstances. Some might shatter our existing financial security, such as a divorce, the death of a partner, or a natural disaster. Others, such as receiving an inheritance, can actually have a positive impact. Regardless, the amount of work, as well as the emotional toll involved in managing the financial aspects of such a change, can be paralysing.
Anytime you’re forced to deal with a major shock, having an emergency fund is critical. It can allow you to deal with any immediate costs, literally buying you the time you need to get organised and develop a plan of action. After that comes social support. Reach out to financial experts, friends, and other women who have dealt with similar circumstances to help you. They can offer advice, encouragement, and knowledge that can help you avoid potential pitfalls and get back on your feet as quickly as possible.
As part of the It starts with Action, we want to encourage women to talk to their mothers, sisters, daughters and friends. Different people have very different kinds of relationships with money, and we don’t all view our financial needs the same way.
Sharing experiences, knowledge, and ideas can not only help us build greater financial literacy, but it can also help to start a larger conversation about women’s finances and what we can do as a society to more comprehensively address the issue for all women.