Financial independence is the cornerstone of equality for women – and should start today, People’s Choice Credit Union’s Lisa Jones says.
“International Women’s Day is the perfect time for women to take stock of their financial position which is why we’ve sat down with some of the financially savviest women in our business to come up with a toolkit to help empower others,” Mrs Jones said.
“Women generally outlive men, yet because of a number of factors, they often have less money when they need it the most. Financial independence is a fundamental need.”
1. Start with the basics
“The foundation for managing money is having a budget. It shows you how much you have coming in as well as how much is going out and gives you a picture of where you are so you can make the changes you need to realise your goals,” Mrs Jones said.
“Once you understand where your finances are at you should look at getting rid of bad debt like loans on purchases that lose value fast or high interest rate credit cards that hold you and your finances hostage. Consider consolidating your debt which can help you pay it off faster and give you back control of your money, but only where you know you won’t build up new debts.
“Most institutions like People’s Choice and ASIC have budget planners that you can use and experiment with different scenarios to help you plan.”
Click here to access our free Budget Planner.
2. Savings Goals
“Whether you want to plan for a holiday, establish an emergency fund, save for educational expenses or find extra money to put into superannuation, you need to have short-, medium- and long-term goals and a plan on how you are going to achieve them,” Mrs Jones said.
“Wealth creation is important. Not everyone wants to work until the prescribed retirement age but if you decide to retire early you will need a way of financing the years between retirement and when you are able to draw on your superannuation.
“Try to put 10 per cent of your income each year away for long-term savings and consider salary sacrificing extra superannuation contribution as this makes your money go even further. It is good to understand that the first dollar you put in always works the hardest and why you should consider contributing extra towards your superannuation or other savings as early as possible. If you are not convinced, have a play with a compound interest calculator to see the value for yourself.”
Click here to learn more about preparing for retirement.
3. Empower yourself
“Planning is good but education is the key to success. The more you understand about your finances, savings, investing, superannuation and other financial matters the better off you will be,” Mrs Jones said.
“It’s also about control: where is your superannuation and where are your finances? How readily can you access and manage them? Are your choices of accounts the right ones to help you achieve your goals?
“Empower yourself by seeking the advice and help you need. Websites like People’s Choice and ASIC have easy-to-understand information on numerous financial topics. If you’re looking for longer-term plans, consider speaking with a financial planner to get a better understanding as to how you can best achieve your goals.”
Learn more about growing your super at this link.
“It is important that you have what you need to protect yourself financially if something goes wrong,” said Mrs Jones.
“Income protection and other insurances can play a pivotal role when you most need them. But even if you do have them, it is worth checking whether the cover is sufficient. Most superannuation has built-in income protection, but you need to check whether it is enough to cover your expenses if you needed to be off work for an extended period of time.
People under 25 should be particularly aware of this as some funds are no longer including this cover for this age group.”
5. Empower the other women in your life
“Check on the other women in your life whether it is your grandmother, mother, sister, daughter of friend. Not everyone has the financial tools they need to be independent or empowered,” Mrs Jones said.
“Make sure the other women in your life know how to use financial apps on their phones and have access to their internet banking and know where to get financial help and information they may need. Make sure younger women know about wealth creation, how to avoid debt and how to make the most of superannuation.
“We have all heard the stories or know women who were older and didn’t have the tools they needed to stand independently after there partner died, or women who have remained in abusive relationships because they don’t have access to the financial resources they need to leave. Let’s not leave that legacy to another generation.”