The nuclear families of the 1950s — when women were a rare part of the workforce — are long gone. In 2016, the traditional roles of men and women in the workplace have drastically changed. Women today are empowered with far more career choices and independence than ever before.
Yet, with talk of glass ceilings and lack of diversity in many organisations, it’s clear things aren’t always equal. According to the 2015 MMP Financial Index Report, in Australia 32 per cent of women are regarded as financially unfit, compared to 25 per cent of men. While more women are pursuing their own careers and starting their own businesses than ever before, it’s clear that we still have a fair way to go in terms of financial literacy.
Women should never feel as though they need to sit back and ask someone to make their financial decisions for them. Instead, it should be something that they feel confident in their ability in, in order to assess their own finances and make considered plans.
With the economy changing, and housing prices and the cost of living only going up, it’s more important than ever for both men and women to understand their finances and make well-informed decisions. The ability for a sole income worker to pay off a standard average mortgage has become increasingly challenging and, as a whole, Australians need to be more careful with their money.
The problem is that most people don’t even know where to start. We get so caught up in our day-to-day lives, that we don’t stop to apply the principles of planning and organisation into our personal income that we implement at work. Think about it — when was the last time that you considered where you’ll be in 20 years, insuring yourself for financial emergencies, or what savings you have in place if you’re weren’t able to work.
While these things might seem far off and unnecessary, being prepared for a financial emergency on a personal level is incredibly important.
The report discovered that 28 per cent of overall Australians are ‘financially unfit’ and unable to meet regular payments, carrying lifestyle debt, limited or no insurance, and no financial plan. Many people don’t track where their money is coming from or where it’s going out — either because it’s too daunting, takes up too much time, or they don’t have an understanding of their personal cash flow.
I’ll admit that when I stopped to work out how much I was spending on something as simple as a takeaway coffee each month, I was shocked to say the least. However, it’s incredibly important to actually see these figures in black and white, in order to avoid spending beyond your means, without even realising it. Making some small changes as simple as having your coffee at home or at work can make quite a difference to your savings plan.
Once you have this information right in front of you, you have instantly put yourself in a position where you can start to set yourself goals. Whether it’s an aim to save three months’ worth of your salary, or saving on smaller things like buying coffee and lunch out, regularly looking at your finances will help you consider what your assets are and help you work out if you’re adequately covered.
When people have a legal problem, they consult a lawyer, or a medical problem, they go and see a doctor. So, why not consult a financial advisor?
Consulting a professional, even as a once-off, or setting up personal tools to alleviate the hassle and stress of managing your money will make the process significantly less daunting. Consider adopting tech tools — even accounting software like Xero — into your personal life, the same way that you would in a business, which will allow you to receive real-time alerts about your personal expenses. There are even apps like Sharesight that can monitor your shares.
Being able to understand and access your finances on a day-to-day basis will quite rapidly improve your financial literacy — which is an area that women can feel empowered to take control and boost our levels of financial literacy as a whole.