The financial “Gender Divide.” We have all heard in the media about women being at a financial disadvantage to men during their financial life and retirement. What is a good way to take control of your finances?
It is often a heated debate about the reasons why. People wonder whether it is evidence of discrimination or empowered women making lifestyle choices around their choice of job and family commitments. Regardless of the reasons for the disparity there is indisputable evidence that there is a substantial difference in pay, savings, debt reduction and retirement savings between men and women. As opposed to considering the reasons for that gap, we wanted to look at some of the simple things that you can do to narrow the financial gender divide.
Where to start
Work out where your money is going and how to make it stretch further. Central to any good financial planning, is having a thorough understanding of your financial position. This means knowing exactly what your income is, and having in-depth understanding of where your money is going. In the past, this has been a tedious task. However, now technology does much of the hard work for us. Look into apps which track cash flow.
Use debt to your advantage
Use debt to your advantage and not disadvantage. It is all too easy to fall into the trap of purchasing items on high interest credit. Avoid this type of debt, however use debt to purchase quality assets for long-term wealth accumulation such as property and shares. Borrowing to invest is a necessity to accumulate wealth however it is important to do so sensibly and within your means.
Plan for later life. Women should consider salary sacrificing to their superannuation funds as early as possible. They should also consider ensuring that their superannuation is invested in quality high growth assets. The earlier that you contribute to super the more time that the effect of compounded returns have to boost your retirement savings.
Take control of your financial situation, and invest in your own financial literacy and education. Don’t leave it to your partner or parents to make decisions for you. Seek financial advice and assistance where required. This could be in the former of a mentor, trusted friend or financial advisor.