ways women can add muscle to their financial fitness

Five Ways Women Can Add Muscle to their Financial Fitness

A few simple steps can make a valuable difference to financial wellbeing – but many women are overlooking the basics.

A recent Financial Fitness white paper by Mortgage Choice found that rising living costs are the single greatest worry for Australian women, cited by 38.9% of respondents. It’s an issue that eclipses concerns over personal health (17.2%) or even job security (12.0%).

In today’s environment of sluggish wage growth, it’s not surprising that rising living costs present a challenge. However, the same research found that almost 60% of women are worried about their financial situation.

The thing is, there are plenty of steps women can take to shore up their financial strength, to enjoy a greater sense of control over their money and where they are heading financially.

1. Stay in touch with your finances

When it comes to money matters, nothing stands still for long. Yet one in five women rarely look at the state of their financial health more than once a quarter – this includes 7% who only check out their finances when an emergency arises.

Regularly keeping up to date with personal debt and savings and staying in touch with investments like super is a great way to gain a clear picture of where you stand financially. Chances are you could be better off than you realise.

2. Get serious about saving

Saving may not be as much fun as spending but it’s the starting point to boost financial wellbeing.

On the plus side, 40% of women are saving at least 10% of their take-home pay. The bad news is that 19% save nothing, and a worrying 8% admit to spending more than they earn.

It’s easy to put savings on auto-pilot. Try setting up an automatic transfer of funds to a savings account each pay cycle, then sit back and watch as the pool of spare cash grows.

3. Give debt the attention it demands

It’s no secret that Australians have high levels of household debt. What is surprising is how debt makes us feel.

Two out of five (38%) women are embarrassed about their debt. One in three try to hide the fact that they have outstanding debt.

Rather than opt for a cover up, aim to tackle debt head-on. This is especially the case for high interest credit card debt, which unlike a home loan, isn’t backed by an asset that will rise in value over time. Adding just a little extra to regular repayments is a surefire way to whittle away the balance without too much impact on your budget.

4. Have protection in place

Life has a habit of dishing up surprises – not all of them good.  Being unable to work for several months would leave many women (and men) scrambling for cash. Two out of five would rely on personal savings to tide them over. One in four simply don’t know how they’d cope.

Only 21% of women have income protection insurance in place. Yet it could be a financial lifeline if your regular pay cheque dries up.

5. Plan ahead

One in two Australian women are concerned about not having enough money to retire on. And it’s a very real concern. Broken work patterns, lower rates of pay (which mean lower employer-paid super contributions), and greater representation in part-time and casual roles all work against women when it comes to growing retirement savings.

However, growing super makes a lot of sense, especially for the 53% of women who say they have no investments at all beyond their home.

Super has plenty going for it. It’s tax-friendly, effortless, and because it’s an ultra-long term investment, compounding returns have a chance to work their magic. Consider talking to the boss about salary sacrificed super contributions, add to super from your own pocket – you could be eligible for a government co-contribution. Or ask your spouse or partner about adding to your fund, it can be an opportunity to pocket tax savings today.

At the very least, check that your fund charges competitive fees. These will impact the value of your final nest egg.

Five steps that will boost your financial fitness – try one or try them all, to discover that the power of financial wellbeing is within your reach. Have a look at the full breakdown of the Financial Fitness research here.

 

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