Why financial planning is key to your wellbeing
The need for personal financial advice to underpin the overall wellbeing of an individual is becoming very apparent. Recent research released by the Australian Financial Planning Association reveals that three in five Australians do not have a financial plan (or only have a loose one), while a quarter of all Australians don’t seek advice when making financial decisions1.
Even more alarming is the reality of gender disparity on finances
According to the Australian Government’s Workplace Gender Equality Agency, Australian women are experiencing higher rates of poverty than men in old age2 and are more reliant on the age pension as their primary source of income3. Being single appears to increase the risk of poverty and it is much more common for women than men to live alone4.
Women also face systemic barriers to financial wellbeing in retirement
Not the least of which is a 17 per cent pay gap5 and from age 20 onwards, a lower median super balance than their male counterparts. Australians are also living longer with an increasing proportion of retirees living until they’re 90 – an expected 40 per cent of females and 26 per cent of males6.
Financial health is a core pillar of overall wellbeing
Gallup scientists have been “exploring the demands of a life well-lived”7 since the mid-20th century in partnership with leading economists, psychologists and other acclaimed scientists. They’ve focused on the common elements of wellbeing that transcend countries and cultures with their research revealing five distinct statistical universal elements of wellbeing: career, social, physical, community and financial8. The fact that financial wellbeing commands equal respect as a contributor to overall wellbeing means it must be as valued as secure employment or maintaining physical and mental health. It is intrinsically entwined.
Financial confidence and conversation is universally important for all women
Women – many of who are highly educated – often lack the confidence to get more involved with financial planning despite a genuine desire to better understand and manage their financial wellbeing. However, it’s incredibly important that women embrace financial management because at some point in their lives they will likely be the only one making their financial decisions.
A comprehensive financial plan provides a solid foundation
It doesn’t have to be complicated, but a good adviser should be able to help you address savings and investments, retirement, education, emergencies, major purchases, insurance and other personal financial goals. A financial plan will outline whether your goals are realistic, address your cash flow, help you maximise your money and identify potential risks. Most of all, it will instill confidence in your financial decisions and ultimately help optimise your wealth for retirement.
So make today the beginning of your financial future
Getting good advice is the first step to gaining confidence. No matter your gender, income, financial position, marital status or location, make it a priority to secure your financial future. Ask a question, start a conversation and consider a plan. Your wellbeing is the most important thing and your future self deserves it.
This insight contains general financial advice and was prepared without taking into account your objectives, financial situation or needs. Any forward looking statements in this insight are based on current expectations at the time of writing. No assurance can be given that such expectations will prove to be correct. As always, your personal circumstances are critical when considering any financial strategy and seeking professional personal advice is highly recommended.