Women can do it for themselves
Women’s progress to financial equality suffered a setback in the June quarter, as COVID shock factors put the brakes on the female-led recovery seen at the start of 2021. That’s according to the latest Financy Women’s Index (FWX), which measures and tracks the financial progress of Australian women towards gender equality.
While the FWX rose in the June quarter, the pace of progress was slower than in the March quarter 2021. That’s because women remain particularly vulnerable to lockdowns and the disruptions from public health and social distancing orders.
Unlike any other economic crisis in Australia’s history, Financy believes the fallout from the COVID-pandemic has intensified the financial inequalities faced by women. This includes the gender pay gap, which now stands at 14.2%, something that translates in practical terms to a $261 weekly difference between men and women’s full-time weekly wages.
The situation has been dubbed the ‘pink recession’. But whatever you want to call it, the impact of COVID-19 has not been gender-neutral.
On the plus side, the pandemic has made it more acceptable to work from home. That’s likely to benefit women, since it is usually women who take time out of the workforce to care for kids and older relatives. But it won’t do much to address the pay gap.
There are however, important steps women can take to improve their financial future. And it can all start with growing savings.
I realise that the idea of women having a so-called ‘secret’ savings account can be contentious. But growing your own savings doesn’t have to be about building a war chest to protect you from relationship breakdown.
Growing numbers of Australian couples are choosing to shun the once-accepted practice of pooling their financial resources. These days, couples are just as likely to have a joint account solely for shared household bills, while maintaining relatively separate financial lives though still working towards shared long term goals such as a comfortable retirement.
The beauty of growing savings is that you can start to accumulate funds to invest. Yes, it can take time. But when it happens it can be very empowering. And I’ve comes across plenty of research that shows women can naturally have what it takes to be successful investors.
Women tend to research investments more than men. We’re more likely to take a long term approach rather than ducking in and out of investments, which tends to benefit your broker more than your portfolio.
If you’re not convinced, consider this. A study by UCLA Berkley found men tend to be overconfident about their ability as an investor, and trade nearly 50% more frequently than women, meaning they can experience higher costs and lower returns.
Here in Australia, research shows that women spend more time researching their options, and are better than men at matching investments to their life goals. Women are also more likely to keep a level head during any sharemarket storms.
They all sound like pretty good credentials to enjoy investment success. The key is to have the confidence that you can do it. A good foundation for this can be boosting your own financial literacy. There are plenty of freely available resources both on the InvestSMART website as well as other sites like MoneySmart and Canstar.
Developing an understanding of money matters is not hard. Most of it has a foundation in commonsense. But the more you know, the more confident you will be about making financial decisions and ultimately, about taking control of your financial future.
Frequently Asked Questions about this Article…
COVID-19 has slowed women's financial progress in Australia, intensifying existing inequalities such as the gender pay gap, which stands at 14.2%. The pandemic's impact, often referred to as the 'pink recession', has not been gender-neutral, affecting women more due to their vulnerability to lockdowns and social distancing measures.
The gender pay gap in Australia is currently 14.2%, translating to a $261 weekly difference between men's and women's full-time wages. This gap highlights the financial inequalities women face, impacting their overall financial security and progress towards equality.
Yes, working from home can benefit women financially as it offers flexibility, especially for those who take time out of the workforce to care for children or older relatives. However, while it provides convenience, it doesn't directly address the gender pay gap.
Growing their own savings empowers women by providing financial independence and security. It allows them to invest and work towards long-term goals, such as a comfortable retirement, without solely relying on pooled financial resources with a partner.
Yes, research suggests women can be successful investors. They tend to research investments thoroughly, take a long-term approach, and maintain a level head during market fluctuations, all of which contribute to better investment outcomes.
Women can boost their financial literacy by utilizing freely available resources on websites like InvestSMART, MoneySmart, and Canstar. Understanding money matters is largely based on commonsense, and increasing knowledge can build confidence in making financial decisions.
Maintaining separate financial accounts allows women to have control over their finances while still working towards shared goals with a partner. It provides financial independence and security, enabling them to manage their own savings and investments effectively.
Women often spend more time researching their investment options and are more likely to align their investments with their life goals. This careful consideration helps them achieve financial success and stability in the long run.