So he’s finally let me loose on the blog! Hi all, it’s Tash here, arguably the better half of the Millard family and proud supporter of Sufficient Funds (read: I get to embrace the privilege of editing James’ work as a ‘hobby’ whilst I juggle my full time mum role on mat leave).
I’ve tried to get James to write about this topic which is near and dear to me. He’s totally on board, but last week he turned around and asked why don’t I write it? So here we are! I’m not claiming to be a better writer than James, but let’s face it, I write all of his good jokes anyway! I will promise less swearing.
I am, however, claiming to be much closer to this topic: the need for women to be 100%, hands down, no excuses, completely on top of their own financial situation. Full stop.
This includes, and is not limited to, understanding what comes in and what goes out of your household, general knowledge of the finance industry, how it works and where to get genuine advice.
The consequences of not being in control and knowledgeable in this space are greater than many would think and it is way too easy to take this stuff for granted.
I grew up in a family of three girls with both parents who were finance professionals. One advantage I had was that there was always a conversation taking place in our house on some financial topic. I knew the basics and could easily converse on many topics related to finance.
I had a Dollarmite account (basic kids savings account) and we did school banking where we would take our leftover pocket money to school each week and send this off to be deposited in the local bank.
I married a financial planner. I often get asked the question – well does that mean you have all your money sorted? (true story) i.e. do I have a budget and stick to it and know all the ‘right’ investments. For the most part the answer is yes, but that’s not always been the case. You just have to follow the Sufficient Funds journey to see that we haven’t always had it all together.
The question people should ask me is – how much do I actually get involved in the money stuff?
It has always been important for me to ensure that I had an adequate income coming through the door – I knew the importance of establishing my own financial assets (that old savings account!), and I have worked hard to secure this income.
I admit what I haven’t always had front of mind is the need to be 100%, hands down, no excuses, completely across what happens to that money.
I’ve learnt that it can be very easy to leave the “finances” (read – everything from tax returns, investments, insurance and super) to someone else. I’m financially savvy in my professional life, managing million dollar P&Ls, but I haven’t always carried this same level of responsibility through to my personal life.
So, as we’re airing dirty laundry, some simple things that I’m guilty of taking for granted:
- Not counting change when paying cash – yep, embarrassed to admit this one and this also sounds really simple to ignore, but at the end of the day if I was lax about change from a store purchase, would I carry that laxity to other more significant investments?
- Not checking my super was being paid correctly – I knew how much super should have been paid, but I was guilty of not making sure that this was actually turning up in my account. A small clerical error was to blame and this was corrected as quickly as it was identified, but had I not checked, I would have missed out on funds that were rightfully mine for my future.
- Not personally completing important financial applications – sure I signed the dotted line, but I’m guilty of putting complete control (I’m deliberately not using the word ‘trust’ here, it’s a trap! See below) in my partner’s hands. Sure I’ve seen Gone Girl, I know people get screwed over in movies and real life, and perhaps I’m just lucky that hasn’t happened to me.
I’m proud to say I now try to be much more on top of my own money situation, but I’m not perfect and this is something I have to continue to keep front of mind. I’m also now much more passionate to educate other women about the importance of women understanding their own financial position, even when that is part of couple or family assets.
In my humble opinion, the “trust” issue I mentioned above, i.e. women putting complete faith in their partner making financial decisions, is one of the key problems. Sure, we say it’s ok because we trust that individual to take care of our best interests, but in reality ladies, shit happens. Relationships break up and people die. This is reality. You can’t assume you are always going to be as stable and the only person you have to count on is actually YOU! We also need to realise this when we are stable, not only when the proverbial hits the fan.
Being currently on maternity leave I personally understand the significant gaps that exist financially for women who choose to start a family. I could write an entire post on this, but one significant concern is the super gap. Earlier this year the Senate handed down its findings on the Inquiry into Women’s Economic Security in Retirement and noted that the average superannuation balance of women at retirement is about half that of men and one of the key reasons for this includes women “taking longer periods out of paid employment” i.e. mat leave. Put simply, if we miss out on Super now, it will impact our financial future.
So my point is, we’re starting on the back foot here, there’s no excuse to sit back and not take full control of our financial future.
In Australia in 2017 there were about 85,000 women “supported by specialist homelessness services”. Have a read here of why women are at risk, and note that although we know domestic violence and mental health have an impact on these figures, there are significant impacts on these figures due to women’s financial position and “…women, particularly those reliant on either part-time wages/salaries or parenting payment (single), may be more at risk than men.” They go on to confirm “One of the main reasons is related to gender-based economic/financial inequality. On the whole, women earn less income than men”.
What these figures don’t reveal though is how easily this can happen to any of us. We can’t sit back and deny it! Not having control and/or understanding of our money and “what we’d be left with” should something happen, has an impact on these stats.
Just how quickly the downward spiral of financial distress can happen is shocking and something we all need to be aware of. This can happen to you!
Financial education for women is lacking in Australia and we need this to start at high school if not primary school. For us already grown adults, we need to start catching up today. No excuses!
Women need to take care of their own finances and ensure their own financial position is well established, without relying on any other individual. Sit up, pay attention and count your change!
UPDATE: check out my follow up to this: Women, educate yourself; where I provide a list of resources that you can use to take control of your own financial self.