Business

How women can gain control of their finances

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LAST week we talked about the financial disadvantages faced by women in comparison to men.

Due to the ‘motherhood penalty’, women’s pension saving falls behind their husband’s, because they often take five or more years out of the workplace to raise a young family.

Then there is the ‘gender pay gap’, where men earn the equivalent of six weeks’ salary more than women, and also tend to scoop the better-paying middle management jobs that tend to come your way in your late 30s.

This week we have some tips for women on how to combat these financial disadvantages, by gaining control of their finances.

First, here are some new numbers that demonstrate the problem, based on a survey of 10,000 people done in June of this year.

Almost a third of women (29 per cent) worry about their debts, compared to 23 per cent of men.

Over a third (37 per cent) of women say they are ‘just getting by ‘ or ‘struggling’, compared to 29 per cent of men.

The last two years of the pandemic have also not been kind to women’s finances, and worry levels have increased, as saving for a rainy day became more difficult or even impossible. Two in five women say they’ve been worrying about their inability to save, and 11 per cent say it worries them every day.

A good target for saving is to put away the equivalent of 3-6 months of our salary, to shelter us in the event of some unexpected financial shock. However, over a quarter (28 per cent) of women say they would be broke in a month if they were, for instance, to lose their job.

Many women say they have had to borrow during the pandemic, with the result that over a quarter are seriously worried about their debts.

The path to living debt-free (or with your debts under control, at least) begins with working out what you owe.

Then you need to look at your spending, to see where cuts could be made.

The priority is first to clear your most expensive, high-interest debts, such as store and credit cards. Once this is achieved, you can proceed to set cash aside in a savings account each month, working towards that magic 3-6 months figure.

Next, you might want to think of family protection, those insurances that ensure you family are financially secure if you were to die (life insurance) or had to give up work due to a serious health setback such as cancer, heart attack or stroke (critical illness insurance).

Finally, you should remember that financial planning is a long-term thing, and paying attention to pension saving will secure the wellbeing of you and your family once you retire.

As you can see from the survey, if you are a woman in financial difficulties, you are not alone. But our financial lives are better with a plan, and we can take a great first step by speaking to a financial adviser today.

:: Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com.