“Women are paid less, retire with less, and are more likely to experience economic insecurity after relationship breakdown. Financial disengagement isn’t a personal failing, it’s often a rational response to structural inequity.”—Shey Hooper, Head of Operations and Partnerships, Arise Foundation
Key points
- Women face many barriers to achieving financial wellbeing, but through education, open conversations and encouraging inclusive policies, the impact can be lessened.
- Sharing ongoing caregiving responsibilities more equally among genders is an effective way to level the playing field.
- By being transparent about finances with their friends, women can learn and grow their financial wellbeing together.
Finances play an integral role in our wellbeing. But why is there a gap between the financial wellbeing of men and women?
Research shows the average Australian woman has 40% less net wealth than her male counterpart. And the differences start early—studies show a gap in women’s financial confidence appears even from the age of 18.
According to Shey Hooper, Head of Operations and Partnerships at Arise Foundation, women’s financial engagement does not occur on a level playing field.
“There’s the gender pay gap, a concentration of women in lower paid industries, career interruptions for parenting and unpaid caregiving for the elderly. All of these things structurally limit a woman’s lifetime earnings and superannuation accumulation,” she says.
So, what’s causing these barriers and what can we do to foster change?
What is financial wellbeing
But first, let’s talk about what financial wellbeing looks like for women.
“It’s about women feeling safe, confident and in control of their money both today and into their future. That means having the freedom to make choices about how they earn an income, where they work and not having constraints around them due to financial dependence,” says Shey.
Allyce Mitchell, Commercial Manager of Life at Australian Unity, agrees that financial wellbeing is about the ability to make the choices you want. Alongside her career in financial services, she also has two young boys, Clark who’s seven and Laurie who’s four.
Financial wellbeing has allowed her to work part time beyond parental leave and into the early years of her children’s lives. It has meant she can be present with them in a way that’s meaningful for her.
“Financial empowerment meant I had options. Being able to spend time with my kids is 100% what I wanted and it would have impacted my wellbeing if I wasn't able to make that choice,” she says.
“Whether you have children or not, you are going to come across decisions in your life where something is really important to you, and if you’re not financially independent, you may not be able to make the decision that you want.”
How cultural norms can prevent financial confidence
Shey says there are two types of financial barriers women face: structural and cultural.
Structural barriers are the ones mentioned above such as a concentration of women in lower paid industries.
But cultural barriers also play a big role, and one difference is that these barriers often start from a very young age.
“A lot of people are raised in households where they see that financial management and decisions are made by the man. Girls aren’t taught about the need to be financially independent. That can have an influence on confidence, engagement and expectations before they even start to earn an income,” she says.
Our cultural norms create patterns and embed beliefs about how things should be done. These barriers might start young but often they’re enforced throughout life as well.
Caregiving responsibilities contributing to financial inequality
“We can’t change the fact that women have babies—they’re going to need career breaks, and that can be a wonderful time in a woman’s life—but those life events can require a woman to be financially dependent on someone for a period,” says Shey.
According to Shey, the uneven allocation of caregiving responsibilities leads to reduced income, lower super contributions and an impact on career progression for women.
And it’s not just 12 months of parental leave to think about.
“Children still exist after parental leave. They have school events and sick days and a whole lot of other mini interruptions that unevenly sit on the shoulders of women,” she says.
So how can we lighten this impact? Sharing caregiving responsibilities more equally is a great start.
“The more we can normalise men also being the ones who take career breaks for caregiving responsibilities, the better. It creates a level playing field and helps to share the load, because those life events will continue to happen,” says Shey.
What schools and workplaces can do to foster change
Shey says both schools and workplaces could more actively prioritise education and policies that support financial wellbeing.
“It starts with how we educate children. There’s a role for schools in how we educate both boys and girls around the importance of being financially literate,” she says.
“Workplaces provide income which is essential, but they’re also responsible for some structural issues like gender pay gaps. They could play a much more proactive role.”
Some ways workplaces can be proactive include:
- Looking into how their remuneration is set to eliminate gender pay gaps
- Considering what they’re doing to support all genders taking parental leave
- Educating themselves about how to alert for red flags around financial abuse
- Educating employees on financial independence and literacy
Why financial discussions are important among women
Allyce says one of the best things women can do for their financial wellbeing is to have open conversations about their financial endeavours.
“The lack of transparency and discussion around finances can create shame cycles, self-doubt, comparison and the idea that finances aren’t a priority among women. There’s so much to be gained from talking about wins, but it’s equally important to talk about mistakes,” she says.
It’s normal to ask your friends about their experiences with restaurants or holiday destinations. So why not ask about their financial experiences?
You could start by saying, “Hey, I’ve been thinking about investing. Do you currently do anything like that? Have you had any good or bad experiences with certain companies?”
And if your friends aren’t implementing any financial practices, ask if you can learn together. You might be helping them by triggering that conversation.
Financial education and getting started with your finances
If you want to prioritise your financial wellbeing, a great way to start is with your own financial education. This might include taking part in workshops, courses and self-directed learning online.
“All of us could benefit from certain levels of upskilling around financial literacy and learning how to be smarter managers of our money,” says Shey.
Allyce’s advice is that it’s never too late to learn, but she urges women to get started.
“Begin by setting some achievable savings goals. Allow yourself to feel good with your progress, then set the next goal. It’s about taking baby steps in the right direction,” she says.
“Financial wellbeing isn’t about having all the answers. It’s about a willingness to engage, ask questions and take a small step forward.”
