It’s no secret that the gender divide, when it comes to wages can spark financial disadvantages for working women. But according to Gender Indicators, Australia, a new study by the Australian Bureau of Statistics, this can also have serious implications in terms of the way we save money.
The report, which surveyed career patterns across both genders, found that 22.4 per cent of women were in casual employment in November 2012 versus 17.1 per cent of men. However, this percentage had no paid leave entitlements, which can seriously impact a woman’s bank balance along with her ability to save.
For Tamia Gallego, founder of Women In The Black – a website dedicated to helping women take control of their financial destiny – workplace inequalities can create powerful barriers to achieving financial goals. “Even if women do the same job as a male colleague, they’re likely to get paid less,” she says. “Although we crave the same financial stability, the pay gap means that we’re just unable to save as much as men.”
Gallego is clearly onto something. RaboDirect’s 2013 National Savings and Debt Barometer (NSDB) found that both genders sought financial comfort as a primary goal of life. Unfortunately, the fact that men are more likely to attract higher pay creates an uneven playing field where women have to work harder to save the same amount.
Gallego also believes that the weight of the expectations placed on women can take a major financial toll. “On average, women take five to seven years out of the workforce to have children. Later on, it’s usually women – and not their male siblings – who take time off work to look after their ageing parents. Women are often conditioned to put children and family ahead of career and money.”
Closing the gap
So how does Gallego recommend tackling this crisis? Setting clear goals is a critical first step to successfully saving money. “If you’re struggling to get into a savings habit, then having a clear goal can make things easier. It’s a good thing to earmark your savings for short, medium and long-term goals. And when you’ve reached these goals, reward yourself along the way to make it worthwhile.”
Focusing your efforts on saving can also fast-track the path to your long-held dreams – whether those dreams involve buying a first home, amassing enough cash for an investment property deposit or funding the ultimate overseas holiday. It’s equally important to make spare cash work for you by swapping a low-interest transaction account for one that will yield dividends over time.
Gallego also recommends avoiding the temptation to reach for your credit card as overreliance on plastic can quickly rack up bad debt.
“If you’re playing with credit, you’re always chasing your tail because you’re always having to pay off your debt. It’s important to be accountable for your cash.”
Curbing the impulse
Credit card addiction isn’t the only factor affecting financial security. The NSDB, which found women are up to 10 per cent more likely to make impulse purchases, shows that unplanned spending is a major obstacle to financial good health.
Gallego says that the lure of impulse shopping can create major financial setbacks for women. She suggests that attaching emotional satisfaction to future rewards rather than an instant fix is one way to curb the desire to shop.
“I have friends who go shopping every week because they want to buy something for their kids or themselves when it’s not necessary. They spend their time at Westfield rather than reading up on personal finance. For me, having money in the banks and assets is what makes me happy.”
She says that for women to safeguard their financial future, it’s important to start saving money now.
“Starting early and starting small is the key. Even if you’re just putting aside $20 a week, it’s still something – compound interest will turn it into $11,000 in 10 years. It all starts with saving money, thinking about the future and staying disciplined. Short-term sacrifices now will give you peace of mind down the track.”[Sources] http://www.abs.gov.au