The ticking financial time bombs catching women unawares

The ticking financial time bombs catching women unawares

For as long as I can remember, I’ve been passionate about helping women escape from, or prevent them falling into, human trafficking. But asking others to donate to the cause always met the same response: they already have their own commitments. So, I decided to act myself.

I launched a firm specialising in advice tailored specifically for women, coming from a female financial adviser (there aren’t many of us!).  I then wrote a finance book for women in the first world, while donating profits to help those in the third world. But more and more, I’m seeing Aussie women living in despair. And with governments failing to drive meaningful change, it’s time we take charge and protect ourselves. 

The common element

Over the years, I’ve met with hundreds of women and spoken to thousands more at Women’s events, in media articles and so on. While their backgrounds are different, the majority have one thing in common: they only seek advice about money because of some “life event” – being widowed, redundancy, ill health in elderly parents/in-laws. And divorce – I’d estimate 40 per cent have either just divorced or are contemplating it. Occasionally I see professional women seeking to maximise their position.

Then we come to couples. Overwhelmingly, it’s the male partner in charge of the finances. For some women, it’s a choice. Some are forced to accept it. For others, it’s complacency.

Interestingly, I have seen many couples where the gentleman has concerns about his wife knowing who to turn to for advice, making sure she will be ok. Some expressly want their wife to be more involved and perceive she would find it easier to speak with a woman. In fact, having a female adviser is the only reason many women agree to obtain financial advice. But single or partnered, the situation is generally the same – prior to seeking advice, the woman has not been in the driving seat of her own financial future.

Barriers to financial independence

There are many reasons for this lack of control:

  • Gender pay gap: 14.2% is the full-time gender pay gap in Australia in 2021. I work a lot with professional women and I consistently see this – especially regarding bonuses. Sometimes they secure a close base pay, but the bonus – which is subjective – can be the issue.
  • Career choice gap and caregiver inequalities: We know women are the dominant child carers. But parents/grandparents don’t want to go into aged care and women feel guilty putting them there. So, they sacrifice their careers or reduce their hours to be everywhere for everyone else.
  • Cost of advice: Not everyone wants or needs a financial adviser. But that choice should be open to everyone, regardless of income. Sadly, many people can’t afford the services of a qualified adviser due to our high base costs – much of which has to do with regulatory compliance. Those costs have only increased post-royal commission. And so the cycle worsens.
  • Domestic violence: Many believe domestic violence solely affects those from lower socio-economic backgrounds. It doesn’t. All levels of society are impacted, including the top end – particularly financial abuse.
  • Age: Basic biology dictates that women usually outlive men. The average lifespan is 85.3 years for Aussie women and 81.2 for men. To put that into context: I regularly see women whose partner has died – often suddenly and unexpectedly – adjust to their new financial realities. But I don’t have any male widowers as clients.

Don’t assume you’re safe

This is the biggest single piece of advice I can – and do – give every woman: don’t stick your head in the sand! Most women winding up homeless, broke, or trapped once felt as secure as you probably do now.

Acrobats don’t plan to use their safety net, but it’s there in case they fall. Take the same approach with money – learn the risks and have a plan to fall back on. Get on your own two feet and stay there. And then maybe you can help others do the same!

Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at www.onyourowntwofeet.com.au

Stay Smart! Get Savvy!

Get Women's Agenda in your inbox