COVID-19 has had a disproportionate impact on women for a number of reasons. For example, women are more likely to be employed in less stable forms of employment, like casual or part-time work. In many households, women also retain primary caring duties, something that came into stark focus as aged care, childcare and schools went into lockdown in 2020.
This International Women’s Day, I want to explore some of the ways women can boost their finances and make progress toward achieving their financial goals in light of the events of 2020.
Here are my top tips to navigate your finances in a COVID-19 world.
#1 Revisit your career goals
Your future earning potential is your greatest asset; even at the average salary, you will earn more than $3 million over your career. With the world of work changing, it’s important to think about how you can grow your income into the future.
While work-from-home was increasingly common before 2020, there’s no doubt that recent events have accelerated the shift. For those women who were unable to work full-time due to caring duties, study, a side hustle, or other commitments, there may be more opportunities than ever before.
Employers gained new insights into their employees’ lives during lockdown, as meetings were beamed directly from and into lounge rooms and kitchens across the country. This gave us all a window into our colleagues’ and team members’ worlds and gave us more understanding of people’s personal lives and challenges.
As a result, more and more employers are also recognising that life is complex and work doesn’t always need to be done between nine and five. This may create more opportunities for women who can’t work standard office hours – so it’s a good time to consider your options.
#2 Increase your financial knowledge
Financial literacy is a primary determinant of future financial outcomes – in fact, it’s linked with a range of areas across everything from your savings to your retirement lifestyle. While there are many financially savvy women out there, research indicates that women’s financial literacy remains lower than men’s across Australia.
If this applies to you, set some goals around increasing your financial knowledge in 2021, as it really is an important step towards achieving your goals. There are many great resources available to support you, including Apt’s free Market Watch newsletter that keeps you updated on contemporary financial planning topics.
#3 Align your values and your spending habits
Your money should support you to do more of what you love, and the best way to ensure this is the case is to align your spending with what’s important to you. During COVID-19, we saw many people’s values shift as the lines between personal and professional lives blurred through lockdown. If you haven’t reflected on your values and your spending recently, now is the perfect time to do so, and our free, step-by-step values roadmap may be a useful tool.
#4 Get comfortable with ‘future you’
The ability to reconcile who you are today with who you’ll be tomorrow is an important indicator of financial success. It’s actually really hard to see ourselves in even twelve months, and, in fact, many studies show that we tend to resent our future selves for making us go without today.
Reconciling ‘current’ and ‘future’ you is really about setting bite-sized, measurable goals that you will achieve in the short term, which grow over time to help you realise your longer-term outcomes. For example, if you want to save for a new car in twelve months, you won’t be able to accumulate all the funds in the eleventh month, so you’ll need to set smaller goals for 1,2,3,6 months, etc. Each time you achieve one of these, you are building the bridge between who you are today and what you want in the future.
#5 Get (more) interested in your superannuation
In Australia today, women will still retire with an average of 47% less superannuation than their male counterparts, partly due to gender pay inequality and also the increased likelihood that a woman will take a career break.
Of course, this imbalance needs redressing, but importantly, there are things you can do to manage your superannuation and improve your own outcomes. It can be hard to see super as your own money when retirement might be decades into the future, but the reality is that how you manage your superannuation today can have a big impact on your life tomorrow.
One critical area to consider is how you structure your super to weather financial storms. Events like COVID-19 are often touted as being once-in-a-generation, but financial downturns can and likely will happen many times during your working career, so it pays to be prepared.
#6 Talk to an expert finance coach
There’s often a misconception that financial planning is about restricting and limiting your lifestyle when it’s actually about enabling it! At Apt, we act as your personal finance coach who is in your corner to make sure you can achieve your financial goals – whatever they may be.
Get in touch to find out how we can help you do more of what you love and stay on track with your life goals in 2021 and beyond.
General Advice warning
The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.
