Whilst the gender pay gap is slowly decreasing, it’s still sitting at 14% against women. This means that on average, women earn 14% less than their male counterparts for the same type of work. Women also retire with 42% less superannuation than men, so when they retire they are significantly more disadvantaged than men.
There are many reasons for these inequalities, from differing parental roles and unpaid work in the home to taking care of elderly relatives and a greater inclination for part-time work. Since women, on average, live longer than men, achieving a comfortable lifestyle in retirement is often an unfulfilled dream.
Whilst we can’t fix all the financial inequalities for women, a little judicious monetary management can noticeably improve your future. So here are my top five tips for helping women take control of their finances.
1. Educate yourself
Now is the time to learn more about managing your finances. There is plenty of information freely available online, as well as books and money management courses. So search for information that will help you calculate the amount of money you need to retire comfortably and investigate your own super so you know exactly where you stand today. Take time to learn more about investing in shares and real estate and decide on the best way for you to boost your retirement savings.
2. Make a budget
Make a five year, one year, monthly, weekly and even a daily budget if that works for you. Know exactly where your money is going, how much is going into super, how much into savings, and then with a solid budget to hand – stick to it!
3. Decide how to save your money
Can you save up a deposit to buy an investment property? Do you want to buy shares yourself? Is it better to buy into a managed investment fund? What about making voluntary payments to your super? Currently, there’s not much point in saving money in the bank or term deposits, because the interest rates are so low. So what’s the best way for you to save and grow your money?
4. Have an emergency fund
Put aside enough money every month as an emergency fund. This is only for emergencies that happen outside your control and should be structured so that you don’t need to dip into your savings. Whether that’s the fridge breaking down, the roof leaking or fence falling down is up to you. It generally doesn’t include a weekend away, buying new updated car when your current car is fine or large screen TV – these are not emergencies, but ‘nice-to-haves’.
5. Avoid getting into unnecessary debt
Generally this means not building up credit card debts and borrowing money for items that do not provide a return for your investment. So if you use a credit card, make sure that you pay it off in full every month. It also means not borrowing money for a vehicle (or other non-asset purchases), because you pay an enormous amount of money back in interest and vehicles don’t become more valuable with time (unless it becomes a classic car, but that takes a lot of time!).
These five simple steps will make an enormous change in your finances, both today and in the future. However, if you need more personal help with your finances, call me (Amanda McCall) on 07 3356 6929 or book an appointment online.