Australia’s gender pay gap has been a continuous issue. Although the gap is slowly closing, it still sits at 21.7% (total remuneration gap). This figure is high due to a lot of different contributing factors, such as time in and out of the workforce, parental leave, part-time and casual roles, and a lower superannuation balance at retirement.
Recent research has revealed that women may also be experiencing a gender savings gap. On average, men have around $14,000 more in savings than women, around a 27% difference*.
A savings gap between men and women could make it harder for women to build long-term financial security for themselves. In addition to the gender pay gap, women generally face more challenges when it comes to finances, such as qualifying for a home loan, investing, and saving for retirement, both inside and outside of super.
So how can women build better financial security?
- Enhance financial literacy: many Australian organisations offer resources and workshops specifically designed for women, covering topics such as budgeting and investing. Websites like Moneysmart are also a good place for valuable information.
- Create a budget: establishing a clear budget can help track spending and identify opportunities for saving. There are a range of budgeting apps available to help you with this.
- Start saving early: small contributions can grow significantly over time. Researching the different savings accounts available can help you find one that will work best for you. Setting up automatic payments through your bank may help you save consistently without having to think about it.
- Invest for the future: investing is a good way to build wealth, but getting started can be challenging, due to the range of options available. Consider seeking the services of a professional financial adviser, who can provide advice tailored to your goals and circumstances.
- Plan for retirement: women often live longer than men, which makes planning for retirement essential. Contributing to your super is a good start, such as salary sacrificing. You may qualify for a government co-contribution if you make after-tax contributions (conditions apply). Even small amounts can compound significantly over time.
- Utilise government resources: Australia offers various programs aimed at supporting women. There are many different financial literacy programs and grants for female entrepreneurs that can provide support.
- Build a support network: connecting with other women to share experiences, strategies or mentoring can be beneficial. Look for local networking groups, online forums or social media communities focused on women and finance.
Closing the gender savings gap is vital for achieving long-term financial security for Australian women. By prioritising financial education, budgeting, saving, investing, and planning for retirement, women can take significant steps toward building a secure financial future.
*money.com.au/high-interest-savings-accounts/savings-statistics
