Whilst we have come a long way in working towards gender equality in many areas of our lives, there is still a lot we can and must do when it comes to the area of financial equality.
Despite the fact, that women are more educated and empowered than even before, we find ourselves in a world:
- Where women over the age of 55 are now the fastest growing homeless people in Australia;
- Where, despite all of the attention on the pay gap, women still earn 14% less than men for doing the equivalent job; and
- Where women are retiring with half the amount of superannuation than men yet women are likely to outlive their male partners
Let’s for a moment consider some of these alarming statistics in more detail.
Firstly, lets focus on the tragedy of our rising homelessness rates for women aged over 55 years and the growing risk of first time homelessness for this demographic, which has alarmingly increased by 30% over the last 5 years. Many women have faced relationship break-downs later in life that have left them financially ruined or have found themselves victims to financial abuse or domestic violence. For others, their situation may have arisen due to:
being forced out of the workforce early;
insufficient superannuation and savings; or
death of a spouse who previously managed all money decisions.
Unfortunately, when we look at the other end of the scale, the situation is not much better for our young Australian females. Despite being better educated than their male counterparts, a 2019 Youth Insight study found that Australian females aged 14-25 years lacked essential knowledge and understanding about the basic concepts of finance, with 83% recording a low to moderate level of financial literacy. In fact:
Only 17% of females aged between 14-25 were found to have high levels of financial literacy compared to 27% of males in the same age group;
Females under 25 were found to have 58% more debt than their male counterparts across all types of loans including HELP debt, car loans, personal loans, credit cards and loans from parents; and
When surveyed, only 21% of young Australian females aged under 25 years felt completely in control of their finances, compared with 31% of their male counterparts.
Whilst as women, we have many responsibilities to juggle and many worries that consume our daily thoughts. Research confirms that finance is the number 1 worry for women. 46% of women finding money decisions stressful and feeling burdened when managing the family budget and household bills.
Not only do we not like managing money, but as a gender it seems we are not even comfortable talking about money, with a recent survey revealing that many women would prefer to get naked in front of their family and friends then discuss financial matters.
So why is this?? Why is it that 85% of women are the decision makers in relation to household budget and family bills and yet, when it comes to the big finance decisions like buying a new car, choosing the right mortgage and investing, the females step back and allow their male partners to take over the decision making and control???
Why is it that women disengage from their finances and prefer to leave it up to someone else to manage??
And women are allowing this to happen even though it means they loose their freedom to choose and their ability to control how they live their life. An example of this was evidenced in a recent study by Westpac confirming that 2/3 of the Australian females considering separation from their partners were hesitant only due to the fear of having to start over financially and independently manage their finances.
I say, it’s time to take our heads out of the sand, step up and take action for change!!!
Because if you are allowing someone else in your life to manage your money for you, you are giving your power away. It’s time to stand up and reclaim your power! It’s time to educate yourself and empower yourself with financial knowledge and financial awareness that will allow you to make the right decisions for you and your family! Financial empowerment will not only instill a greater confidence in you that will transpire to every important life decision you make, but most importantly it will give you choices and freedom! The choices and freedom you need to live life on your terms! To live the life that you want now and in the future without being dependent or reliant on anyone else!
SO WHAT IS THE SOLUTION?
How can we empower ourselves to create Financial Equality between men and women?
We all know about the Pay Gap that still exists in Australia today. Some Australians think this is the answer to achieving Financial Equality. Whilst I agree that closing the pay gap is essential, this will not be enough to create financial equality.
The truth is, even with more income, too many women lack confidence of managing their family’s finances. For example, A survey of millennial men and women earning the same salaries found that despite earning the same income as their male counterparts, fewer females were confident to make important financial decisions. This lack of confidence leads these females into choosing to ignore important financial decisions. They tend to leave decisions to their partners, rather than take control themselves. But interestingly enough, whilst women lack more confidence than men when it comes to finances, research shows that the ability of men and women is the same. Make no mistake, this is not a question of lack of intelligence or intellect. Instead it is, in fact the perception of women and their confidence levels that we need to change!
And it starts with you and me and every other female taking ownership and control of our own individual personal situation and changing our relationship with money so that we are all empowered and confident to understand and manage our finances effectively.
I believe there are five things every female needs to do to become financially empowered
1. Firstly, as females, we need to increase our focus on Positive Self-Talk.
It is said that women have 80,000 thoughts a day and psychologists say that 70% of our thoughts are negative. With 7 out of every 10 negative thoughts it is no wonder why women think they are hopeless at everything. This would include their finances, unfortunately. However, the truth is we have just as much ability and intellect as the men to effectively manage our finances. So its time to ignore that negative self-talk and start believing in yourself and your ability to become financially free and fearless!
2. Secondly, Empower yourself with financial literacy education.
So many females are afraid or embarrassed to admit that they need help when it comes to understanding their finances. They lack the confidence and belief in themselves that they can learn the skills necessary to change their financial position. Whilst it can feel scary to step out of your comfort zone, I have found the best way to increase your confidence. This is by identifying and admitting your weaknesses and actively working towards increasing your financial literacy knowledge. You can do this through financial literacy education.
For example, through the financial literacy seminars and the money mentoring that I run, I see first-hand everyday the amazing life transformation that can come out of financial education and empowerment. The key really is education and there are so many ways you can easily increase your financial literacy. From podcasts to webinars and seminars to money mentoring and coaching, take some time to find the right learning pathway for you that will enable you to empower yourself with financial knowledge and financial confidence. It’s never too late and you can never be too old to learn. So set some time aside to invest in yourself and get learning.
3. Thirdly, Engage and take responsibility for financial matters
If I asked you what your shoe or dress size is I am sure you could answer without hesitation. However, would you have the same level of confidence in answering a question about your superannuation balance, your investment portfolio performance or even your savings?? Ladies, its time to know your numbers! Too many women put their head in the sand and live day to day not really understanding their current financial position or the reality of their future financial position. However, when we stand in a place of knowing, we have the power to change our numbers and change our lives.
Ladies – A man is not your financial plan! And if you leave it up to your partner to manage your finances alone without any knowledge of exactly where your money goes and how it’s invested for your future then you’re leaving yourself extremely exposed in the case of loosing your partner through death or separation. Make sure you understand your current financial position. More importantly, understand what you’re doing with your money currently. That will help you to have a better lifestyle in the future. It will also enable you to retire on your terms when and how you want.
4. Fourthly, learn about investing and invest for your future
In today’s cashless society, where credit is easily accessible, too many of us are sacrificing our future for short-lived instant gratification. Instead, we should be saving and investing more of our money! It is a sad reality that 84% of Australian women, said they did not feel adequately prepared for retirement. 50% of Australian women fear they will outlive their retirement savings. With 40% of Australian retirees unable to afford the luxury of having a meal at a café, we clearly have a situation where many Australians are struggling to enjoy their retirement years due to inadequate finances. The harsh reality is that we can’t rely on the Government Pension or Superannuation alone to fund our retirement. The only way to have the life you desire in retirement is to build wealth through investments. Only that will generate a passive income for you through your retirement years.
The good news is, research shows that women make better investors than men. This because we spend more time researching investment options and are better at matching our goals to our investments. Women are also generally better at managing and mitigating risks.
So there is no excuses to be proactive in working through your goals. You should invest in yourself so that you can have the freedom to choose when and how you retire.
5. Finally, we must empower our children with greater financial literacy
As women we not only owe it to ourselves, but we also owe it to our children to be the role models that they need so they can develop and build the money management habits and the financial literacy that they will need to live a full and fulfilled life and have the freedom to make their own choices. In leading by example and involving your children on your journey of financial empowerment, you will be giving them the greatest gift by inspiring them to also step up and increase their financial literacy and financial confidence empowering them with the ability to achieve financial freedom and have choice in their life!
In conclusion, I absolutely believe in a world were there is pure financial equality between men and women. It is so true that each and every one of us has a role to play. As women, its time to step up, take charge and own your finances!!