Financial adviser and mentor Helen Baker says there are major barriers for women achieving financial equality with men thanks to the gender pay gap, parenting and other family commitments.

She says that the gender pay gap fuels the superannuation gap, with women earning on average 13.4 percent less than men. Weekly that equates to a difference of $242.20 per week for full-time employment.

That leaves women in a vulnerable position in retirement, with women having on average less than half the super balance of men.

Then there’s the career choice gap. Baker adds that women often take on unpaid caregiving responsibilities, for children as well as elderly parents and in-laws. That leaves little time for paid employment and women are forced to work in insecure, low-paid casual jobs that fit in with school hours.

Women then have problems with affordable housing, disposable income, and super savings.

The issue can be cultural as well with women traditionally leaving financial matters to their male partner, so they are exposed should they divorce or make poor investment choices.

Adding to the issue is that women live on average 4.2 years longer than men, so women are paying for a longer lifespan with fewer resources.

Baker says that older women, over the age of 55 face homelessness, with some being forced into homelessness after a divorce or the death of their partner. Even though these women have worked their entire lives they cannot afford a permanent roof over their head and they can’t move somewhere more affordable because they would be isolated from their friends and family, so they would lose the little support they do have.

Other women avoid homelessness by staying in abusive relationships. There is a cost in the welfare, healthcare, and in some cases, the justice system.

She recommends using your superannuation to find secure accommodation and says that it doesn’t need to be a fancy house, just somewhere that you can call your own and have security in. Buying your own home also means that you have an asset in retirement and are not at risk of rental increases while relying on a pension.

Aside from the financial toll, the knowledge and expertise women have are under-utilised and the potential tax revenue is also reduced, so the whole economy suffers.

Baker says that many women still find it hard to return to work because the childcare costs mitigate the potential income. In some instances, the net income could be only a couple of dollars a day, which further entrenches the notion that women should remain at home to look after the children.

There is good news though, with the gender pay gap falling to its lowest level in 20 years. Most recent figures released by the Workplace Gender Equality Agency have it currently sitting at 14.2 percent.

The Federal government has also announced further assistance, including childcare support, to support working mothers.

Baker advises that we need to support our vulnerable. She says that we can close the gender pay gap by empowering women and providing women with opportunities to earn the same income as men so that they can build comparable retirement savings.

She also proposes a back-to-work transitional grant to cover the cost of clothes/dry cleaning and transport to get to job interviews.

The biggest step that can be taken though is to involve women in financial planning, which can be helped with more women becoming financial planners.

She has found that women who do seek financial advice are generally in a very difficult situation and proposes that women seek financial advice before they are in a crisis.

In her experience, when dealing with divorce, the husband typically focuses on monetary matters whereas women focus on legal matters. She says that women need to be made aware of the financial implications of a settlement before they sign any agreement. She says that women also take financial advice from friends and family members when they should be relying on them for emotional support, and talking to the experts about their finances.

Her top eight financial tips for women are:

  1. Be involved. Don’t leave money matters solely to your partner and don’t blindly forego your income. Don’t think, “it won’t happy to me”. Know your numbers and make financial decisions jointly. If you’re single, get started now.
  2. Check your career. COVID highlighted the insecurity of casual and part-time roles, the majority of which are held by women. There were huge job losses in hospitality and tourism. On the flip side, working from home has become the norm and it’s likely that after the lockdowns end, employers will continue to allow staff to work from home. Now’s the time to reconsider your work. Could you move to a different industry? Could you return to full-time employment? Without the need to commute to an office you can now do the school run or check on your elderly parents, or share caregiving responsibilities with your partner, or become the main breadwinner yourself.
  3. Get good advice. Professional advice is not just for men. It is for everyone and it is tailored to your circumstances. Qualified advisers can give you advice on investments, superannuation, budgeting, tax, and COVID assistance. Advisers can help you learn about options you may not have considered previously.
  4. Have a contingency plan. It is vital that you have an emergency fund so that you can cover the basics should disaster strike. Review your insurance cover and your will.
  5. Plan for the long term. What would you do if your partner was gone? Consider what you’ll do in the future. Singles lose economies of scale, with living costs being cheaper for couples than they are for singles. By all means, hope for the best but plan for the worst so that you are comfortable in the future.
  6. Use the 50/30/20 strategy when dealing with your income. 50 per cent should be used for your essential expenses, 30 per cent for the things you want like dining out, clothes and entertainment and 20 percent should go into savings.
  7. While it can be tempting to sign up for products on your partner’s behalf, she advises against it because if they miss a repayment or you split up then you are liable for the expense yourself and that could affect your credit rating.
  8. Hide your savings from yourself. Keep your savings account at a bank other than your main bank so it is harder to access your money and choose a savings account that charges withdrawal fees so you are less likely to withdraw your money.


More advice from Helen Baker can be found in her new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women.

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