Finding your financial feet
I’m thrilled to celebrate International Women’s Day – a day where as women we can acknowledge how far we’ve come and how much more we can achieve. As we are invited to pledge for parity, it is a timely opportunity to be reminded of the persistently alarming gender pay gap of our nation and to examine what this means for our personal finances. Financial empowerment for women needs to be front and centre, especially in the current debate around changes to superannuation.
The gender pay gap in Australia has hovered around 15-19 per cent for full-time employees for the past two decades1. Each year, women need to work an additional 65 days just to earn the same amount in wages as men in similar jobs2. Women in part-time jobs face a gender pay gap of 40.6 per cent while for casual employees in female-dominated organisations in the private and not-for-profit sectors see this extend to 43.3 per cent3.
Within this context, it is not difficult to see why the median superannuation balance for women is lower than men’s – even from age 20. This is clear evidence of underlying systemic issues that make it very difficult for women to achieve financial parity during their working life and into retirement. In fact, Australian financial literacy research shows that women across all age groups find dealing with money more stressful than men4 and women in the older age group (60 plus) in particular want more knowledge in more complex areas like planning ahead for retirement needs and retirement income, investments, staying informed and knowing when to engage a professional5.
Whether you are starting out, returning to work after a break or simply want to ensure a secure financial future, make sure these five issues are on your radar so you can act today for a better tomorrow.
1. There is a gender pay gap
One of the challenges we as a country are still confronting is the gender pay gap. It has barely reduced in the last 10 years.
2. The pay gap matters to your take home pay
There are practical impacts from the gender pay gap that you need to consider. These include a lower take home pay to cover day-to-day costs, saving for a home deposit, building investments or paying for further education costs for yourself or your children.
3. There are flow-on impacts from the pay gap
Women also retire with less superannuation to sustain later years. Apart from having a lower take home pay to make extra savings into super, the women’s super guarantee payment of 9.5 per cent is based on this lower salary.
4. Be aware of your pay and be engaged about your career
Regardless of current structural impediments, feeling as though you have the authority to be assertive and ask for what you need is vital – that is empowerment. If we are going to close the gender pay gap and improve workplace flexibility, actions should focus on empowering women about finances and career decisions.
5. Build your financial literacy
Experience shows that financial literacy positively affects financial behaviour. More knowledge and understanding about our finances creates options for women, such as planning how to financially manage a change to part-time work, taking a study break or staying at home to look after the children.
Efforts to fix the gender pay gap are slow moving but actions to empower women can be powerful accelerants. With increased knowledge and confidence in personal finance, women are more likely to know what questions to ask to help get good financial outcomes – and most importantly to have the confidence to ask them. Having a strong level of financial literacy and being aware of the financial impact of career decisions and changes in the workplace will not only help women get closer to pay parity, it will also improve your overall financial wellbeing throughout your career and in retirement.
This insight may contain general financial advice and was prepared without taking into account your objectives, financial situation or needs. Before acting on any advice, you should consider whether the advice is appropriate to you. Seeking professional personal advice is always highly recommended. Any forward looking statements are based on current expectations at the time of writing. No assurance can be given that such expectations will prove to be correct.