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Women’s Financial Challenges

Posted March 20, 2018 by MoneyLink

Women: Loving life and living alone.

According to recent statistics from both Australia and overseas, the 21st century is shaping up to be the ‘the age of living single’.

Not only are young people waiting longer to get married, a lot more than ever before are choosing not to actually tie the knot. Today, the number of single adults in many nations across the world is unprecedented.

More women than men live alone.
This includes Australia. Across the nation, one-in four households is a lone-person household. Rates have significantly increased since the 1970s and show no signs of slowing down. According to the Australian Bureau of Statistics, about 13% of adults live alone.

Living alone is more common amongst women than men.

In 2011, 13% (1,023,042) of women aged 20+ lived alone compared to 12% (852,128) of men. This means that 55% of Australians living alone are women.

For some women, separation or divorce has led them to living alone, for others – and this is increasingly the case – it’s simply a lifestyle choice: a desire not to want to be tied down, to be ‘masters of their own destiny’.

Irrespective of the reasons women live alone, there’s an important message here: Women face different financial challenges from men and having the right financial strategy in place is crucial to long term security.

Women’s earnings vs spend
Despite our best efforts to gain workplace and pay equality for women, across many professions, women still earn a lot less than men.

….And here’s the rub, they tend to spend more too.

In 2014, the Financial Health Barometer explored the savings habits of Australian consumers. The research showed that men had $1175 in savings each month while women, by comparison, saved just $675 per month.

In the data, Gen Y showed up as being the most committed savers, while baby boomers were the only generation to not increase their monthly savings. Of course, many boomers have accumulated substantial super, real estate and savings and have significant assets.

The importance of a secure financial future
But the key for all women, is to ensure they have adequate financial control, especially over the future.

Women have different financial challenges over the course of their lifetime: Lower incomes, and therefore potentially less money going into super for retirement. Analysis by Westpac shows that Australian women earn 12 per cent less than their male peers in their first full time job, and for most of them the gap never closes. What’s more, according to the data, Women are also less likely to ask for a raise, with 60 per cent never having done so — compared with 46 per cent of men.

Many would argue, women tend to have a more expensive lifestyle too, (with greater health and beauty costs than men). There’s also the fact that whether married or not, a greater number of women than men will take significant time away from the workforce (or work-part time) to raise families or to care for relatives.

Plus, as the research has shown us for a long time, women live longer than men, and therefore have more post-working years that they need to fund.

ASIC estimates show that at retirement, Australian women have less than half the amount in their superannuation than men do. The numbers are for women $231k versus $454k for men. That’s a significant shortfall.

On top of these factors, the need to save is also greater than ever before. Not just for women, but for everyone – the cost of living is rising. Basic necessities such as fuel and public transport and electricity and food are becoming more expensive.

The good news is that small incremental steps can make a big difference over the long term. And that means having a financial plan. Financial planning is not about forgoing all of the fun and putting the money aside for the future, it is about understanding personal income and expenditure so you can save more, and make sound investments, without compromising your lifestyle. It can really help, to get professional advice.


MoneyLink Financial Planning Pty Ltd is an Australian Financial Services Licence Holder. No:.247360

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