Why ‘putting a ring on it’ is no guarantee of financial freedom

Women often get the raw end of the stick when it comes to money matters. But when knowing what traps to avoid, we can build a brighter future for ourselves, writes Helen Baker.

I work with many women seeking to protect their financial future. Sadly, many have only sought out this advice after they’ve been burned – often by a relationship breakdown or the death of a partner.

Perhaps what upsets me most – aside from the scourge on society that is domestic violence – is how single women in their 50s and 60s are the new face of homelessness.

They worked their whole lives, often juggling paid employment with raising children and running the household. They are left grieving after being widowed or divorced. Yet instead of moving on with their lives, they are bouncing between friends’ couches and sleeping in their car.

It sounds extreme, but this is the traumatic reality for a growing number of women right across Australia – especially in our capital cities.

Troubling trend

What’s worrying is that for every one of these women, there are several more at risk of following the same path: often without even realising it.

We all know women are the dominant caregivers, but this is usually thought of only in the context of children. Yet for many middle-aged women, caregiving involves simultaneously looking after children and elderly parents/in-laws.

The routine looks something like this:

• Get the kids up and off to school by 9am
• Drive across town to the parents/in-laws
• Make them lunch, do their shopping, take them to doctors, do their housework
• Drive back to pick the kids up from school, then ferry them to after-school sports, music lessons etc.
• Trek back to the parents/in-laws to prepare their dinner, ensure they take medications and prepare them for bed
• Travel back home, feed the kids, supervise their homework and get them ready for bed
• Go to bed and repeat tomorrow

Is it any wonder that women make up the majority of part-time and casual employees?

And consider how this impacts their finances: lower incomes, less job security, lower superannuation.

Add to this that women statistically live longer than men, and things are set for financial hardship.

Taking control

But it needn’t be this way. Collectively as women, we are more educated, skilled, independent and financially literate today than at any time in history. It all comes down to taking charge: developing a strong plan and learning from the experiences of other women before us.

There are a few things I tend to find are useful quite broadly, regardless of life stage or circumstances:

• Manage your time wisely: Share caregiving with your partner and other relatives, do school carpooling with neighbours, give your kids greater responsibility at home. Whatever it takes, find time in your week that you can put into income-generating activities.
• Invest in yourself: If you can, upskill in your area of expertise – especially while you’re not in full-time work. Getting those extra qualifications or skills now can boost your earnings when you do return to the workforce full-time. That also means higher super contributions and more money to invest/pay down debt.
• Keep an emergency fund: COVID is a classic example of something you never saw coming hitting your earnings hard. If you put aside even a small pot of cash regularly, it will take the pressure off should disaster strike.
• Consider your living arrangements: Statistics show that people who own their own home are much better off financially in retirement. So look at how you can keep a roof over your head, no matter what life may throw at you.
• Don’t be afraid of advice: Many women are scared of seeking advice where money is concerned. But unless you’re a financial expert, you may miss out on budgeting, super, investment, debt and tax relief strategies that will make your money work harder for you.

Above all else, I’d say take an active interest in your finances. Don’t leave it up to your partner: you need to know what’s going on and be part of the decision-making.

It’s your money too, and where money is concerned, ignorance is never bliss!

This article was originally published in 50 So What