These days there’s a lot more awareness of the disparity between opportunities and salaries of women and men in the workplace.
While women are often at a disadvantage from the beginning of their careers1, they also tend to spend more time away from work to have children and care for their families.
It’s about more than saving
Women can be very good at saving. A financial literacy survey by the Australian Government found that women are highly confident in their saving habits2. But they can be less confident when it comes to investing.
Women need to seek financial advice and make sure they’re making the most of their income and their time in the workforce—and a focus on investing can help build long-term wealth.
Women are closing the gap
Not only are women generally paid less than men but the average full-time working woman earns 17.6 per cent less than a man3 over time. The good news is women’s super balances are on the rise.
In the 12 months to June 2015, women with superannuation had an average balance of $101,900 compared to the men’s average of $158,100.
That means women have about 64.5% of the average male balance although it’s only around a decade ago when the average woman had just 57.6% (2005)4.
How to build financial literacy
Every woman can do more to increase her financial literacy and be better off in the long term—consider our top tips.
1. Change your thinking
Ask yourself whether you expect to be comfortable in retirement and what proactive steps you’re taking today.
If you don’t have a strategy that goes beyond day-to-day budgeting, seek financial advice and gain a clear understanding of the opportunities you have to build investments and long-term wealth.
2. Aim for a specific super balance
Super is one of the most tax-effective environments for building long-term wealth so it’s worth paying attention to today. Use our what’s my number calculator and set a dollar amount for your super balance. Then use specific strategies―like salary sacrifice―to grow your super.
And make sure you’re not losing super money in extra fees. Get your super sorted today with AMP’s free super service—it’s easy to consolidate your super and find any you may have lost along the way.
3. Establish a budget and invest
Using our budget planner, work out where you’re spending your money. Organise and plan your spending and set up automatic deposits so your living expenses are taken care of.
Then work towards setting money aside for additional investing outside of super and seek investment advice from a financial adviser. By investing a little amount on a regular basis you can make a very big difference to what you end up with—use MoneySmart’s compound interest calculator to understand the difference regular saving can make.
4. Get the right tools
There are some great online tools to help you master your money and your financial future:
- Find out more about Investment basics in our online learning module.
- Our budget planner can help you manage your day-to-day spending and put aside money to invest.
- Explore our learning module Managing your money so you can make more of your money.
- MoneyBrilliant’s online app helps you organise all of your accounts, loans and your income to give you a safe spending limit once all the essentials are taken care of.
- Our News & insights keep you up-to-date with strategies and tips for managing your money and building wealth—sign-up today.
5. Seek advice
If you’re considering investing in your future, speak with a financial adviser so you can plan ahead and set up an investment strategy to help you reach your goals—and above all, enjoy a comfortable retirement.
1 "Not only are women paid less than men but statistics show that female graduate salaries are about 90 per cent of equivalent male graduate salaries"—www.wgea.gov.au/sites/default/files/2013-04%20-%20Stats%20at%20a%20glance_0.pdf.
2 Financial literacy, Women understanding money (pp2), Australian Government Financial Literacy Foundation.
3 Gender workplace statistics at a glance, Australian Government Workplace Gender Equality Agency.
4 Super gender gap large, but closing, Financial Standard.
This is a follow-up article about whether you would be better off renting or buying a property.