Future Proofing Financial Strategies for Women

Australian women are among the most educated and financially stable in the world but they still face major issues around the gender pay gap and retiring comfortably, writes Penny Collicoat, Director of Women with Edge, who offers her top tips on future proofing financial strategies.

The nation’s 17.4 per cent gender pay gap has big implications for superannuation savings. The average female is expected to retire with about $112,600 in super savings compared to $198,000 for a male.  

Over a working lifetime a 25-year old male is expected to earn 1.5 times more than a woman of the same age. There is no reason why women can’t be matching and exceeding their male cohorts in superannuation and financial security by simply considering a few future proofing strategies.

Often people think if they just save more they will be better off. That’s true but only one piece of the puzzle. Putting in suitable investments for you are just as beneficial to your overall financial picture and the more you understand what you are doing, the better off you will be… education around your finances are the most powerful tool you can have.

1. Show  some interest in your finances

We often make excuses for our time – “I’m too busy with the kids, too busy with work, too busy building a business, family, parents, social life, to spend time on my financials.” Yes you are busy, but life is busy these days and so when will a good time be? Take the time to see where your basics are at and what can be done about them. You can actually be out of pocket at retirement by thousands and thousands or not be in a position to buy your home or set up the business you want properly if you don’t do some homework. Get some books (there are some really great ones out there), do a short course or go and see a financial planner to get help where you need it. It’s easier than you think.

2. Take a look at the different super fund offerings out there

You’ve joined a new job and when asked to complete your paperwork for your TFN, bank details and super fund you do the minimum and tell HR just put me in whatever super fund is the default fund. Where you are in life should be influencing how your super is invested, not your employer! You do have a choice of super fund. Just a 2 per cent return difference on your super fund can mean the difference between enjoying retirement or not, due to it being such a long term investment.

3. Put a budget in place

You have no responsibilities and enjoy the feeling of spending! Buying what we want, eating out frequently, nice wines, new outfits for events, but what happens when we get a bit older and we are starting to think about our long term plans? While budgets can be seen as a “dirty” word, they do serve a purpose- financial stability. You can do them as simply or as complicated as you like but start by listing down all your expenses for the month/quarter. You can also allocate money to going out, clothes, gifts (even if they are to yourself). This will give you an idea of what expenses can be cut back, so you can start a savings plan or salary sacrificing into super- even $20 a week is a good start!

4. Put some financial goals in place

Like training for a fun run or marathon, if you are working towards something you will be more disciplined in your training and technique leading up to the big race! Your financial goals work exactly the same way. If you are saving for something or can track your progress then your plan will be much more effective. Goals can also be adjusted, as time goes on, just as you would set personal and career goals for yourself. As the old saying goes… “a goal without a plan, is just a wish”.

5. Get some advice

Don’t be wary about seeking advice. There are many great financial planners out there that care for their clients and their outcomes. When you are looking for a new doctor you ask your friends and family, look at your local area and do some googling. Once you visit them for the first time, you decide how comfortable you are with them based on their manner, experience, costs, specialities etc. It’s exactly the same for financial planners, so start asking around, googling and ringing so that your future self will be thankful.

About the author: Penny Collicoat is the Director of Women with Edge – a Financial Planning Business focusing on securing women’s financial futures.