Money is still a taboo topic of conversation. Although we live in a world where our lives are digital and readily shared, talking about money is still off limits. But it shouldn’t be because having a keen grasp on personal finances is crucial.
On average, women earn 18.2% less than men for the same job. Their earning potential often takes a dive after they have children and, as a result, they retire with significantly less in superannuation than men. Strong financial literacy can be the difference between a woman reaching her financial goals or being left at the starting gate.
Yet too many women, no matter how smart and savvy, lack the confidence to truly own their finances. It can be hard to reach out and ask for advice.
With this in mind, and to commemorate International Women’s Day, MLC set out to break this taboo with a panel discussion featuring four female financial gurus – Financy Founder and CEO, Bianca Hartge-Hazelman; Corporate Super MLC and Plum General Manager, Helen Murdoch; MLC and Plum Superannuation Education Consultant, Martina Taylor; and MLC Director of SMSF and Investor Behaviour at NAB, Gemma Dale – who are also working mothers.
They shared practical tips on how they manage their money. So, what can you do today to get your finances into gear?
Have ‘the money talk’
Finance is the leading cause of relationship breakdown in Australia.
“A lot of people don’t want to talk about money – we’re happier to talk about sex, religion and even politics,” Martina says. But when it comes to your partner, there’s no substitute for a frank and open conversation about the shape of your finances. This means coming clean about income, joint accounts, goals and, of course, debt.
Bianca suggests being clear about the things you need to feel financially empowered in your relationship, such as open communication, and deal breakers like handing over full control of your assets. Being clear about these can help you both through tricky financial conversations and keep you on the same page.
It’s important to remember that people react differently when discussing money. If you’re worried about your partner feeling uncomfortable during ‘the money talk’, Gemma recommends thinking of your finances as “just numbers” to take the sting out of the conversation.
“If you can take the emotion out of it and just say ‘can we get the numbers on a page’, it makes it less anxiety-inducing,” she says.
While it can be uncomfortable to discuss, all our experts recommend having financial conversations early in your relationship and regularly.
“Transparency matters in a relationship and even more in a breakdown,” Gemma says. “But make sure you get help if you need it too.”
Log into your super
Many Australians have a mental block surrounding their superannuation and don’t think of it as their money. But super can be the most significant financial asset that you own.
“It’s very hard to get people thinking about retirement until they’re closer to it,” Helen says, “But we can only impact the future – not the past – and every little bit counts. Even just getting online, looking at your account balance and knowing that’s your money is really important.”
Martina says the question many women ask is: “How much should I aim to have in my super?” The oft-cited million-dollar number can make many people switch off because they don’t think it’s possible to accumulate that much in their fund.
“It’s a myth – you don’t need a million dollars,” she says. “Go to the MLC website and there’s content to help you work out a realistic target. This will help you think about the next phase.”
If you’re taking a career break or think it’s on the cards, Bianca says it’s critical to work out if your employer pays superannuation on parental leave. It’s also useful to think of innovative ways to top up your super while on leave.
“When I was on maternity leave, I used to match the cost of nappies each week in my superfund,” she says.
Do your research
Despite progress, the gender pay gap persists, putting an extra hurdle in front of women and their finances. A simple step women can use to improve their finances is to stop underselling themselves at work and ask for the salary they deserve.
Gemma suggests doing your research first. It’s often hard to divorce yourself emotionally from what you feel you deserve to be paid but, by understanding your industry, you can better illustrate your contribution – and your worth.
“You’ll have a more objective view of your worth and you’ll go into that conversation with more confidence,” she says.
Our experts don’t suggest sacrificing flexibility for pay. Increasingly, workplaces are becoming more flexible and they say there’s no reason you can’t enjoy that and a better salary.
Take a financial day out
Above all, our experts agreed it’s critical for women to engage in their finances if they want to be financially fearless. Bianca’s advice? Take a financial day out. Dedicate some time on a Saturday morning, or whenever you have time, to look at your overall finances.
Once you have a clear grasp of your income, liabilities, assets and expenses, it will become obvious what you need to focus on – whether that’s paying down debt, saving or investing.
Gemma suggests once you decide on a course of action, automate it. Using apps and technologies to take the decision-making out of the process makes it easier. “You’ll find in 12 months that mortgage will be paid down a little more, or you’ll have a saving account with a couple of thousand in it,” she says.
Helen agrees the first step in owning your finances is hardest, but it’s also the most important. “Work out what you want and then seek help,” she says. “Don’t be afraid to ask – nobody has all the answers but you’d be surprised how much advice is out there.”