Australian women today have less financial resources compared to their male counterparts and this is particularly evident in retirement. On average women retire with about a third of the superannuation balances of men. And because women live longer than men those limited resources have to stretch even further. So what is to blame for the financial gender gap?
Many factors contribute:
- Australian women still earn 17% less than men
- If they have children typically women will take between 3-6 years away from work
- Those women will return to work on a lower comparative wage due to the career gap
- Women have lower levels of financial literacy
- Some women are still less involved with financial decisions when in a relationship which can have particularly negative financial consequences if the relationship breaks down.
The reasons behind some of these factors are obvious and complicated but I wonder whether some fault lies with the financial services industry itself. For being so focused on men. Think of the last financial ad you watched or the last financial expert you saw in the media? Chances are it was a man, probably talking to another man. There is no doubt that money conversations are still dominated by men.
And it impacts women. Every day I have female clients walk into my office who have been so intimidated by the financial services sector they have put off seeking advice they have so desperately needed, often when they have needed it most. Which is almost always the case with divorce.
Time and time again I see women who have been bullied into agreeing to poor settlement terms. The legal sector has to take some of the blame for this; if they do not encourage women to seek financial advice until after the financial agreement has been decided. How can anyone agree to a financial settlement without knowing how much money they will need to survive and get back on their feet? They can’t.
But when it comes to the gender gap and money we cannot just play the blame game. Each of us has to individually step up and be the change we want. We need to take charge of our financial circumstances and be prepared to get involved and learn. So how can you take charge and close the financial gender gap?
- Don’t get overwhelmed, start small and set clear goals to work towards.
- Know yourself financially. What makes you tick, what are the drivers behind the financial decisions you make?
- Consolidate your superannuation; however be careful to focus on the things that matter. There is no point saving a few dollars on fees if the investment performance of your fund is poor.
- Ensure you have enough personal insurance. Did you know that most financial advisers provide advice on insurance at no charge to you as the insurance company pays them a commission? You can also have your super fund pay for many of the insurances you need.
- Know how you are financially tracking towards retirement.
- Don’t be afraid to ask for or seek professional advice. These days 22% of financial advisers are female and the number is growing every year.
The old saying knowledge is power is true when it comes to closing the financial gender gap. Becoming intimate with your money will provide you with confidence that will no doubt put you on the fast track