Recent studies have shown that in developed countries, one third of women are now the financial breadwinners, with the ratio growing. Women tend to take control of the family finances by paying the bills, budgeting for household expenses and doing most of the grocery shopping.
And while women are earning better income and gaining more status in the business world, when it comes to the bigger picture finances of building wealth and security, such as superannuation plans and investment opportunities, women still have a short-term, immediate view about money and would rather have someone else manage long-term matters for them.
This is what financial experts now refer to as “The Female Financial Paradox” where women are the main bill payer and shopper for their family and earning more but lag behind men when it comes to long-term money plans?
There are four key areas where the paradox can be challenged:
- Boost confidence. Even the most intelligent and capable women can be plagued by self-doubt when it comes to money matters. Seek good advice as early as possible, is the best tip you will ever receive. A financial adviser can work with you to identify goals and the best way to achieve them.
- Super-size your future. Everyone says that it’s a good idea to overhaul your super, but it often slips down the ‘to do’ list. Start by checking your super balance and how it’s invested, then get some advice and see if it can work harder for you.
- Don’t wait for someone else to grow wealth. Society over the last few centuries has taught women that their husbands will handle the finances, and this way of thinking has been slow to change. Now, there are a myriad of options for women who want to create wealth independently.
- Make goals not numbers the focus. For men it’s often about how much money they have on paper, but women tend to want to know if they can afford to buy a house, pay for their children’s education and travel. Try treating savings as a regular monthly expense like any bill.
Whatever your age or financial situation, it’s important to understand money matters for your confidence and general financial knowledge. If you’re not the main financial manager for your family and you experience the loss of your spouse, or divorce, you don’t want to be left financially powerless.
Here are some ways you can learn more about the bigger picture finances and how they affect you:
- Review your own financial statements on a monthly basis so you know where you stand.
- Talk to your partner if you have one, and set up monthly finance meetings to start learning the intricacies of long-term money management. Start communicating effectively about your family finances and your financial goals.
- Ensure you’re up to date with all of your family finances in the event of a sudden loss of a partner. Know the details of all your bank accounts, properties, assets, investments and loans.
- Know the details of all your bank accounts, properties, assets, investments and loans.
- Don’t be shy about asking for advice.