Money tips: how to overcome challenges unique to women

Not enough pay, not enough super – women are constantly playing catch-up trying to build wealth, and here are experts’ tips to help.

The fairer sex does not yet receive a fair go financially from Australia’s employment and retirement saving systems, but changing rules and attitudes are slowly improving the outlook for women.

Author Helen Baker, the founder of financial advisory On Your Own Two Feet, says women are still “under-represented at the highest levels”, but more are taking up positions of authority in business and politics and younger generations are more aware of equality.

“The wheels are turning in the right direction – many countries and even sports organisations have made massive leaps already,” she says.

Many money challenges are almost unique to women, Baker says, and these tips may help overcome them.

GENDER PAY GAP

Baker says Aussie women today earn almost 14 per cent less than men on average – that’s about $243 a week for a full-time wage.

“It creates two levels of inequality – lower pay packets now, in turn meaning less money going into superannuation for retirement,” she says.

“Women need to find the confidence to ask to be paid what they’re worth.”

Baker says Covid-19 demonstrates that people can work remotely, and this presents an opportunity to negotiate flexible working arrangements.

Jo Crotty has overcome many financial challenges since her husband died of cancer 12 years ago. Photo: Steve Pohlner

RETIREMENT GAP

Australian Taxation Office data shows the median super balance for men aged 60-64 is $178,808 but for women it’s $137,051 – a 30 per cent difference.

The super savings gap shrinks to 18 per cent for people aged 30-34, with males at $38,764 and females at $32,904, but it’s still significant and often driven by women taking time out of the workforce for children or part-time jobs that pay little or no super.

“Many women don’t seek financial advice, often because they fear the male-dominated finance world – so they miss out on super, tax and investment benefits,” Baker says.

JBS Financial Strategists CEO Jenny Brown says women should focus more on the future, which can be “really hard to do”.

“It’s a matter of sitting down and making sure they have got a plan to have enough money put away for retirement,” she says.

DIVORCE SETTLEMENTS

Brown says divorce is often a trigger for financial strife, and women should not rely on their partner to manage their finances.

“So many couples are separating,” she says.

Baker says women can take emotional advice from family and friends – but not money expertise.

“Another classic mistake women make is taking the family home they can’t afford by themselves, or at the expense of any superannuation or other joint assets,” she says.

“Be more active in joint financial decisions. Understand what you have before things turn sour.”

LIVING LONGER

Senior women usually need to fund more retirement years because their life expectancy of 87.7 years is almost three years longer than men.

“You can help your situation pre-retirement, such as by using catch-up rules to boost your super balance while you’re still earning,” Baker says.

“Don’t count on simply inheriting from your partner once they pass on – often, the money is gone from poor decisions or hefty medical bills.”

Author Helen Baker says its good to show children that money doesn’t grow on trees.

SINGLE PARENTS

Baker says single mums outnumber single dads four to one, and should be kinder to themselves and realise that one income can’t provide the same as two.

“Plus, it’s valuable to show your kids that money doesn’t grow on trees,” she says.

Jo Crotty, 50, lost her husband Rohan to melanoma 12 years ago when the couple had four children aged between one and five.

“I never signed up to be a single mum – it’s the cards dealt to me,” she says.

“I didn’t want to lose my family home or the values my husband and I intended to raise our kids by – I just had to make it happen. We have gone without, and I have had to say no.”

Crotty kept the house, was helped by an adviser who is “my rock financially”, and founded non-profit group Danger Sun Overhead, which has so far put 60,000 workers in Queensland and other states through its skin cancer awareness programs.

FOUR SIMPLE STEPS

•Seek advice from someone you trust.

•Take action, and don’t procrastinate.

•Think strategy – saving tax pays yourself rather than the ATO.

•Start saving and investing early so compound interest can work.

Originally published as Money tips: how to overcome challenges unique to women