International Women’s Day seems like a good time to talk about women and finance.
Not so long ago, generally speaking, men were the higher income earners (if not the only household earner) and consequently controlled the family spending, allowing their wives an allowance for housekeeping. These days it is far more common for the earnings difference to be narrower and women less likely to be satisfied with an allowance arrangement.
It is not uncommon nowadays for women to be in charge of the family finances, paying the bills, doing the shopping, planning the holidays, but it appears we still need to get a little more selfish when it comes to financial planning, as reported recently on Stuff;
- Women worry about money more but are less likely to have a plan. We also don’t have the confidence to ask for help. (AMP November 2017) So let’s get planning people! If you’re already managing the household budget and think you’re doing ok spend time with a cup of tea and a calculator (or spreadsheet if you really want to get serious) and work out your longer term financial plan. If you’re not confident, get a group of friends together and talk about it, you might be surprised at what you know already, or go as a group to an advisor. Feel free to ask for a woman.
- We earn less over our working lives, have more time out of the workforce and live longer so we have more retirement years to prepare for. Another reason to get out that calculator and work out exactly what you think your retirement needs will be. If you can afford to keep making voluntary payments to KiwiSaver from your household budget, while you’re not working, it’s worth doing. If you can’t, just make sure you jump straight back in when you return to work and even consider increasing your contribution percentage.
- Women take on more of the cost of childcare when they go back to work. Women are more likely to reduce their work hours if childcare costs become too expensive and if a women separates from the father of her children they are more likely to absorb more than 50 per cent of the childcare cost. We need to take a longer term view of our earnings potential. There may be a few years when the cost of childcare uses up your total earnings and you may think it’s not worth it, but the long term benefit of staying in the workforce in terms of career progression and earnings potential will make it worthwhile.
- New Zealanders are notoriously underinsured and none more so than women. Sadly, we see this often at Pinnacle Life. Families insuring the higher-income earner for a high sum insured but neglecting the financial and emotional impact of any health or disability crisis, or death of the primary care giver. Have an open discussion about what it would mean financially if something were to happen to you or your partner. We have a number of tools on our website that can help.
- Finally, women often get into financial trouble for helping others. We are more willing to take on others debt either through relationships or by acting as a guarantor. Before you find yourself in this situation set up a relationship property agreement or seek advice before your sign a guarantee.
We wish you confidence, empowerment and financial independence. Happy Women’s Day.