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. They’re frugal when they need to be and can hunt down a bargain with ease.
Yet when it comes to the bigger picture finances of building wealth and security, such as superannuation plans and investment opportunities, women seem far more bewildered or disinterested than their male counterparts.
This is what financial experts now refer to as “The Female Financial Paradox”. Why is it that 90% of women are the main bill payer and shopper for their family, yet they lag behind men when it comes to long-term money plans? Many experts believe we’re fighting against centuries of social norms where women are excluded from financial discussions, or simply aren’t interested in these topics. A study by Daily Worth found that 60% of women thought their financial investment and planning skills were below average.
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.
Don’t be shy about asking for advice. Whether you are single or a couple, we can help map out your finances and establish a plan that’s in line with your personal and family values. Call us on 02 9241 2575 to arrange an appointment.