Women more worried about rising cost of living

Among the almost 40% of Australians who rank the rising cost of goods and services as their number one financial concern in 2019, nearly 60% are female and just over 50% are male, according to the upcoming Financial Fitness whitepaper of Mortgage Choice and CoreData.

In addition, the research, which explores Australians’ attitude and behaviour towards their finances, revealed that almost 50% of female respondents, compared to just under 40% of male respondents, said they’re concerned about not being able to retire comfortably.

“It is not uncommon in relationships for one person to be assigned the role of the financial decision maker, however this can be problematic if they have limited financial knowledge, which could ultimately hinder the financial goals of not only the couple, but the individuals,” Mortgage Choice chief executive officer Susan Mitchell said in a statement.

“It is crucial individuals take an active role in their own financial wellbeing, whether they are in a relationship, or are single.”

Mitchell added, women, even today, take time off work to start a family and to look after extended family members who fall sick, which means they, on average, spend less time working, and thus retire with less superannuation. The situation is compounded by the gender pay gap, which currently sits at 21.3% among full-time staff according to the Workplace Gender Equality Agency.   

“These factors combined mean women can be left financially vulnerable after the breakdown of a marriage, or death of their partner if they have not taken an active role in managing their finances. This is why it is paramount that each individual has a strategic financial plan in place to protect their future,” Mitchell said. 

Mortgage Choice financial advisers offer these five tips on how both genders can gain better control of their finances:

1. Consider the life you want to live. Write down what you want to accomplish, whether that be buying a house in the short term, sending kids to school or living a comfortable retirement. 
2. Gain a clear understanding of your living expenses. Knowing how much money you’re spending is as important as knowing where you’re spending it. One of the foundations of retirement is knowing how much you spend now in order to get a picture of how much you will need in the future. When preparing financial plans, financial advisers consider the rising cost of goods and services, which is typically 2-3% per annum.
3. Segregate your spending. Receiving several bills all at once often gives people the impression that life is getting more expensive. By segregating your expenses that are a few months away, you can create a safety net and avoid getting undated with bills. If your car’s registration is due in 12-months’ time and you know the amount, divide the amount by 52 weeks and put it in a separate bank account so you don’t feel like you suddenly need to produce hundreds of dollars.  
4. Know your level of risk. You may not get the returns you’re seeking by simply leaving all your savings in a bank, so work out an appropriate strategy on how to invest your money by speaking to a qualified financial adviser.
5. Do your research. Join educational programs like Mortgage Choice’s financial bootcamp to better understand the basics of financial wellbeing and learn ways to become more financially fit.