- Financial wellbeing
- 3 minute read
Closing the gender gap and working towards a world where equality is championed and celebrated remains a key strategic aim for individuals, as well as being on corporate agendas across the globe.
Whilst we strive to balance things like equal representation in leadership roles on UK boards, there is still a more fundamental and widespread gap when it comes to financial health, with women lagging behind men in terms of lower average pension pots and other savings, and also with financial confidence.
And although bridging this gap isn’t something that can be solved in a day, International Women’s Day is a great time to reflect on what women can do to help themselves, and also what others can do to support the women in their lives.
Women
1. Strive for financial independence
Set your sights on having your own financial independence so that you don’t have to rely on others for your financial needs. Use a budgeting tool to look at your own finances alongside any couple/family finances, to understand your budget and set spending and savings goals.
2. Have a financial plan
Ensure you've got a financial plan in place, and use your budget to help you achieve this plan.
3. Have a backup
Have an ‘emergency fund’ and arrange financial protection to provide that financial resilience in case you need to rely on it in the future.
4. Family planning
Make sure within your family unit, your financial health is considered and planned for as well as your partner’s, and specifically if one of you is taking a career break/ reduced hours for childcare/other care needs.
5. Be money aware
A higher proportion of women tend to be the more financially vulnerable party when it comes to divorce or on the death of a spouse/partner. In a couple, always ensure you are fully aware of each other’s finances and are fully involved in financial decisions, so that should the worst happen, you have all the information you need and you know how to access your money
Supporting the women in your life
1. Household bills
In your family be fair when planning bills and costs. Pay bills in line with income. For example, if your income is 70% of your total household income, then it is fair to imagine a 70:30 approach when paying household bills.
2. Ownership of assets
Fairness is also key here but it’s also worth noting that if one partner in a couple pays income tax at a lower rate, then considering who owns the asset generating income is a key tax planning tool.
3. Career breaks
If as a couple you agree that your partner will take a career break/reduce their working hours to raise your family, make a plan to ensure they don’t miss out on contributing to their pension and other savings, so their financial wellbeing doesn’t slip during that period.
4. Share knowledge
Make sure you are both aware of each other’s finances and financial plans and take financial decisions together, so that in the event of either of you losing capacity, suffering ill health or death, the other is up to speed and so can easily access your money and act for both of you
5. Protect
Make sure you have taken out the relevant financial protection so that your spouse/partner/family is looked after if anything were to happen to you
Everyone has a role to play in helping to bring women’s financial wellbeing in line with men’s. So whether it’s looking at making improvements to your own finances, or supporting your mum, granny, sister, aunty, daughter, niece or friend - International Women’s Day, is a good day to start having those conversations and to start making a difference.