My Financial Advantage – Article Introduction
At My Financial Advantage we are aware of the unique challenges women can face financially. That’s why we’re passionate about supporting women to achieve economic independence and security at every stage of life.
We have the knowledge and experience to help you set up a solid financial plan, discuss investing strategies, maximise your superannuation benefits, and put yourself and your family in the best position for the future.
If you would like to discuss how we can help please don’t hesitate to contact our office on 02 4335 4909 for a free initial consultation.
I hope you find the article informative.
Nicholle Shepherd – Principal Advisor
With the gender pay gap still prevalent today, women often face an uphill battle to stay ahead of the game financially. The financial disparity is further compounded when women take time out from full-time work to care for family, sacrificing superannuation and wages along the way.
While we each do our part for the gender imbalance to improve, investing in a financial plan is an excellent way to help you bridge the salary and super gap and build your wealth – no matter what stage of life you find yourself.
The gender pay gap defined
For the past 20 years, the national gender pay gap has fluctuated from 15 to 19 per cent. As of August 2016, it sits at 16.2 per cent, according to the Australian Government Workplace Gender Equality Agency (WGEA).
So what does that translate to in dollars and cents? Well, across Australia, full-time working women currently earn an average of $1,352.50 per week, versus the $1,613.60 that full-time working men earn on average. That means full-time men are making an average of $261.10 more than full-time women every week.
What’s more, in Australia, the pay gap favours men across every industry and across every occupational category.
Women – no matter what their age or stage of life – need to start looking after their financial futures now.
Investing in your future
There are a number of ways women can move towards wealth creation, including:
Working with a financial planner to set up a solid financial plan.
A financial planner can, of course, advise you on a number of non-gender-specific financial issues, such as setting a budget, paying down debt, saving, investing, superannuation, planning for retirement and more.
But a good planner can also address money matters applicable only to women – the lower salary resulting from the above-mentioned gender pay gap, less superannuation as a result of taking time off from work to have or care for children, and single motherhood, for instance.
Financial planners will use their knowledge and expertise to help you develop a clear strategy for managing your finances and achieving your personal financial goals. They’ll work closely with you to create a financial plan.
For women, investing can be a big part of that plan. But understanding the nuances and complexities of investing can be tricky. Again, that’s where your financial planner comes in. A financial planner can guide you on:
- Clearing your debt in preparation for investing.
- Creating a budget and savings plan.
- Reviewing your superannuation and perhaps rolling it over into one fund.
- Identifying your investment goals, both short and long term.
- Saving specifically for an investment.
- Assessing your investment plan – and bigger financial plan – on a regular basis.
In creating an investment plan, it falls to the financial planner to make clear recommendations concerning investments; to outline both the potential risks and rewards of investing; and to communicate any changes that could impact your investments, such as spikes or slumps in the market. (Keep in mind, however, that financial planners – however good they are – cannot predict market behaviour or ensure a positive outcome.)
A financial planner can also help you figure out the level of risk you’re comfortable with when it comes to investing. It’s important to find a financial planner you have a good rapport with and who works to your comfort level.
And remember: You don’t have to have a lot of money to start investing. You can start with a small reserve of savings, or you can begin setting aside a consistent amount that you know you can afford. Again, a financial planner can help guide you in this.
Getting your superannuation ducks in a row.
For many of the reasons mentioned above, women can face distinct challenges in saving for retirement. But there a number of strategies they can use to face these obstacles head-on and bolster their super, such as:
- Salary sacrifice. This involves deducting an amount directly from your salary; consequently, you’ll pay less income tax, too.
- Super splitting. This enables husbands to divide their superannuation contribution between their own funds and those of their wives’.
- Out-of-pocket contributions. Keeping in mind that you can’t access your super before you retire, you might want to contribute regular – affordable – amounts to your fund.
Know what you’re worth
Many professions have an independent guide to salary expectations based on factors like your qualifications and years of experience. If you don’t know whether you are being paid appropriately, check a salary guide site such as Hays or Live Salary.
Source: FPA Money and Life