Women falling behind men in saving money, report finds

Women are taking a more cautious approach when handling their money, a new report has found, and it’s costing them big time.

Financial inequality is costing women big because many are taking a more cautious approach when handling their money, a new report has found.

Women are investing less money than men and one in three women are flying solo by keeping they finances separate from their partners.

In a new report released today by Fidelity Australia, The Financial Power of Women, it included 800 women and more than 400 men and conducted focus groups around financial attitudes and habits.

It showed found only 48 per cent of females hold any savings or investments outside of their superannuation compared to 55 per cent of men.

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Money mistakes are costing women big time.

It also showed 14 per cent of women also kept a secret stash of funds or a credit card away from their partner’s prying eyes.

Fidelity International’s managing director Alva Devoy said women had become great online shoppers and needed to become just as good at investing online.

“You can start investing with as little as $100 to get started,” she said.

“Women are fantastic at online shopping, why should we not be good at online buying of stocks and shares.

“If you have a bank account you probably have access to online brokerages like Commsec, so find an online trading account and start with $100 to learn.”

The report highlighted that women are financially behind their male counterparts because they are often paid less, live longer and take time out of the workforce to raise children or care for sick relatives.

Some women keep a secret stash of cash away from their partner.

But worryingly many women were unsure how to invest their money except for taking a basic approach of tucking away cash in a bank account that could attract an interest rate as low as 1 per cent.

This could end up costing them tens of thousands of dollars down the track.

For example if a woman saved $5000 a year from 2001 until 2019 and kept it in a bank account instead of investing it in the Australian sharemarket the balance would reach $121,000 based on a 3 per cent return.

But this amount is about $70,000 less if the exact same amount was invested in the top 200 Australian stocks during this period — the balance would have climbed to $194,000, analysis in the report found.

The report also found women believed investing was complicated and risky and they did not know where to start.

About 40 per cent conceded they did not know how to invest.

@sophieelsworth

TIPS ON GETTING AHEAD

1. Over the long term, equity risk is usually rewarded.

2. Market corrections can create attractive opportunities.

3. Avoid stopping and starting investments.

4. The benefits of regular investing stack up.

5. Diversification of investments helps to smooth returns.

6. Invest in quality, dividend-paying stocks for regular incomes.

7. Reinvest income to increase total returns.

8. Volatility is a normal part of long-term investing.

Source: Fidelity International.

Originally published as Women falling behind men in saving money, report finds